By NextBestFitHousehold: Very high income, $3M AGI
Executive with $500k salary, $2.5M in capital gains and dividends, family plan.
Result
−$598,143
How it's calculated
| # | Step | Arithmetic | Value |
|---|---|---|---|
| 1 | AGI today | $3,000,000 | |
| 2 | Employer premium (hidden compensation) | $20,143 | |
| 3 | Worker premium contributions end Paycheck deductions for health insurance stop. | $6,850 | |
| 4 | Covered out-of-pocket costs end Deductibles, copays, coinsurance, and uncovered dental, vision, and hearing. | $3,000 | |
| 5 | Slower wage growth from employer tax Employer owes $37,500 in new health payroll tax on this worker; over time that is passed into lower wage growth. | −$13,705 | |
| 6 | Income tax on newly taxable compensation Premiums were paid with pre-tax dollars; wages are taxed. Federal + state. | $3,153 | |
| 7 | Employee FICA on newly taxable compensation 7.65% Social Security and Medicare. The Social Security part also raises future benefits. | $524 | |
| 8 | Income-based health premium 4.0% of AGI above the $32,000 exemption for a household of 4. | −$118,446 | |
| 9 | 7% surtax on income above $1M Top-end measure. | −$139,520 | |
| 10 | Capital gains taxed as ordinary income above $1M 37% instead of 20% on gains above the threshold. | −$340,000 | |
| 11 | Net change per year, long run | −$598,143 | |
| 12 | Net change per year, Year 1 | −$593,299 |
Trade-off: Behavioral responses (timing gains, moving income offshore) would reduce what this household actually pays; the revenue estimate already discounts for that.