How the Medicare Tax Hits High Earners Quietly

Episode 71 of The Tax Policy Podcast dives into the Additional Medicare Tax—a 0.9 percent surtax that applies to wages above $200,000 for single filers. Lucas explains why this tax catches many high earners by surprise, especially when bonuses or stock vesting push them over the threshold unexpectedly. Luna shares a real example of a tech manager in San Francisco who owed $4,500 more than expected after a RSU vesting event. The episode covers the history: the tax was enacted under the Affordable Care Act in 2013 and has quietly raised over $300 billion since. Lucas breaks down the mechanics: unlike Social Security tax, there's no wage cap, and employers don't always withhold correctly. The hosts also touch on the Net Investment Income Tax as a related surprise. A practical episode for anyone whose income fluctuates or who receives equity compensation. #MedicareTax #AdditionalMedicareTax #HighEarners #PayrollTax #AffordableCareAct #RSU #EquityCompensation #TaxSurprise #IRS #WageTax #TaxWithholding #SanFrancisco #TechSalaries #BonusTax #NIIT #Economics #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo