Well, it wouldn't be a payroll tax anymore then.

And since the tax would be used to fund the cost of the reform program, not Medicare, it wouldn't be a Medicare tax either.

(And let's not even think of going through the charade of imposing this tax to cover the reform program's costs, but running the revenue through the Medicare trust fund, so it can be "borrowed" from the Medicare trust fund before being consumed on the health care program -- so we can then pretend that the bonds then left in the trust fund that increase the national debt "shore up and strengthen" Medicare. Puhleeease.)

So since it wouldn't be a payroll tax, and wouldn't be a Medicare tax, why isn't the proposal simply and openly: "Let's tax investment income to pay for health care reform."

Too transparent?

BTW, the argument in the interview, "The stock market is up 60% this year while unemployment is 10%, so it seems investments can bear the cost", sounds an awful lot like favoring putting in a permanent tax structure on the basis of temporary economic conditions that certainly will be a lot different (we hope!) soon enough. Is that really such a good idea?

The Capital Gains tax works just fine when it's at the same level as all other income taxes. Capital gains already benefit from decades of deferred taxation (if you hold an asset for decades). I get most of my income from them; they should be taxed identically to all other income. It would have no negative effects. None.

Dividends should also be taxed like all other income *to the recipient*. The corporate deduction for "dividends paid" should be restored -- this eliminates any "double taxation" and also gives corporations an actual incentive to pay their earnings out.

Currently they have a strong tax incentive to hang on to the money even if it could be better deployed as dividends, which is perverse and leads to corporations gambling.