One tax is on wages, and the other is on investment income.

The additional 0.9 percent tax on high earners will be assessed on wages. This tax will be assessed on joint returns with wages of $250,000, returns for married taxpayers filing separately with wages of $125,000, and $200,000 in all other cases.

For returns other than joint, this is fairly straight forward. However, because the provision requires that combined wages on a joint return must be considered in calculating liability for the new tax, the withholding process will be complicated.

A taxpayer's employer will not know the wage income of its employee's spouse. Therefore, the employer will be required only to withhold the additional 0.9 percent tax on the amount of its employee's wages that are in excess of $200,000 (the provision's threshold for single returns).

Should the spouse of this taxpayer have wages that push their joint wages over the $250,000 threshold, that amount also must be considered in calculating the ultimate tax liability. If the spouse's wages are less than $200,000, no portion of this new tax will have been withheld by the spouse's employer, but some portion would be subject to the tax to the extent that it pushes the couple's combined wages over the $250,000 threshold. These taxpayers will be required to consider the tax not withheld when determining estimated tax liability.

It is also possible that some taxpayers will be eligible for a refund of the additional tax withhold. On some joint returns tax will be withheld by an employer on the wages of an employee with income between $200,000 and $250,000. If the spouse of that employee has no wages, the threshold for the couple's tax liability will be $250,000 (not the $200,000 trigger for withholding) and the employee will have been over withheld.

Separately, the other new Medicare tax on high-income individuals will be applied on investment income. The amount of this tax is 3.8 percent.

The thresholds for this tax are the same as those established for the high-wage taxpayer: $250,000 for joint returns, $125,000 for married filing separately returns, and $200,000 for all other returns.

This tax will be applied to investment income to the extent that such income pushes the modified adjusted gross income (MAGI) of the filer above the applicable threshold.

o In the case of a joint return showing a MAGI of $275,000 which includes $50,000 in investment income, the 3.8 percent tax will be accessed against the $25,000 of investment income that is above the MAGI threshold.

o In the case of a joint return showing a MAGI of $300,000 which includes investment income of $40,000, the 3.8 percent tax will apply to the full $40,000 of investment income.

o In the case of a joint return showing a MAGI of $200,000 which includes investment income of $75,000, there will be no liability for the additional 3.8 percent Medicare tax because the MAGI is below the threshold.

For an individual, the provision defines investment income as income from interest, dividends, annuities, royalties and rents. It also includes taxable capital gains on the disposition of property. Investment income will also include gross income from a business if the business is a passive activity or consists of trading financial instruments or commodities.

Are you clear on this now? No? Well, the first point is that Congress is determined to hit the entrepreneurial class as hard as possible. It is better in their eyes that you don't even realize--or understand--what hit you. The second point is that Congress and Mr. Obama are completely in the dark about how to grow an economy.