President Joe Biden is about to release a budget proposal which would extend the solvency of a key Medicare trust fund by at least 25 years. This would be funded by raising the Medicare tax on people earning more than $400K per year from 3.8% to 5.0%. The tax would not only apply to earnings, it would be taxed on business income, self-employment income and investment income. President Biden also said he would divert some taxes from the government’s general fund to a Medicare fund. Reserves for Medicare’s hospital-insurance fund are only sufficient to fund it through 2028, at which point it would only cover 90% of hospital coverage.
