Newspapers / The Charlotte Post (Charlotte, … / Oct. 27, 1988, edition 1 / Page 3
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BUSINESS7~H/S WEEK Elderly To Pay For Medicare's Extras Thursday, October 27, 1988 - THE CHABLOTTE POST - Page 3A On July 1, 1988 the Medicate Catastrophic Loss Protection Act was signed Into law. This act expands the Medicare catastrophic cover age and prescription drug benefits. This law Is designed to proWde Medicare benefits for the elderly who face long-term medical care such as nursing homes, larger prescription costs. That's the good news. How they decided to pay for It Is the bad news. Part of the cost of these benefits will be paid for by an Increase In the premiums charged to the participants. A large part of the fund ing, however, will be paid for by a premium that will be charged to all persons over the at>e of 6.5 In 1989. An Income tax surcharge will be collected annually starting next year and wlU Increase for the next five years. This premium will be based on Income tax bills exceeding $150.00. For each $ 150 of Income tax paid the premium level Is as follows: (II) 33 percent for all taxpayers (Including Medicare enrollees) whose taxable Income Is between $43,150-$89,560 (single) or $71,900-$149,250 (Joint). (III) 35 percent as an appropriate rate for Medicare enrollees (Iv) 37 percent as an appropriate rate for Medicare enrollees Invest ing In Federal/state exempt mu nicipal bonds In a low tax state. (v) 42 percent as appropriate rate for Medicare enrollees Invest ing In Federal/state exempt bonds In a high tax state. The Financial Comer With Marcus Butts Year Premium Mnx.Prem. Pvmt. 1989 $22.50 $ 800 1990 $37.50 850 1991 $39.00 900 1992 $40.50 950 1993 $42.00 1.050 The maximum premium Is double for couples filing jointly, or $1,600 for 1989. After 1993 the premium will be determined accord ing to Increases In program costs. Example: Let's say that you or your spouse are eligible to receive Medicare In 1989, and you generate $40,000 of taxable Income for that year. Your Income tax on that amount Is $7,333 and your sup plemental premium would be $1,0801 $7,333- 150 = 48.89 48.89 x 2$22.50 = $1,080 If figuring your premium seems too complicated, look at It this way. If you make up to $17,850 and you file single, of if you make up to $29,750 and you file jointly then you are in the 15 percent tax brack et. The Medicare surcharge will raise this rate to 17.25 percent In 1989. For most Investors In this bracket Investment changes may not be warranted. However, If you make up to $22,000 filing single or up to $40,000 fil ing jointly you are In the 28 jjercent tax bracket. Here the effects of the Medicare surcharge are more extreme. In 1989 your effective fed eral tax rate will rise to 32.20 percent! Even more poignant are the effects of this premium on the Investor who Is In the 35 percent tax bracket. Their tax responsibilities will Increase to 37 percent or 42 percent. Because of this legislation many Investments that previously made sense should now be re-evaluated. Bank CDs, government and cor porate funds may no longer have a better tax benefit than some tax free municipal bonds, tax exempt bond funds or annuities. AS A POINT OF REFERENCE... ...for 28 percent bracket Medicare enrollee investors who may be contemplating the purchase of municipal bonds for the first time, here is a taxable eqidualent yield table showing the taxable yield In vestors In various Incremental tax brackets would need to earn to match a like Investment in municipal bonds. The brackets shown are: (1) 28 percent for Medicare enrollees whose taxable Income Is high er than the sums sho’wn on but less than $43,150 (single) or $71,900 (joint). (2) in a tax bracket of: (1) To Match 28% 33$ 35% 37% 42% a tax- exempe yield of: (3) you would need a taxable yield of: 5% 6.94 7.46 7.69 7.94 8.62 5-1/2 7.64 8.21 8.46 8.73 9.48 6 8.33 8.96 9.23 9.52 10.34 6-1/2 9.03 9.70 10.00 10.32 11.21 7 9.72 10.45 10.77 11.11 12.07 7-1/2 10.42 11.19 11.54 11.90 12.93 8 11.11 11.94 12.37 12.70 13.79 8-1/2 11.81 12.69 13.08 13.49 14.66 Note that the equivalent taxable yield you would need to produce an after-tax equal to that of a municipal Investment Is normally much higher than the taxable bond yield which Is actually available In the market. If you have any questions about this very Important legislation or if you would like more Information on this act, please direct your re quest to Marcus Butts, c/o The Charlotte Post, P. O. Box 30144, Char lotte, NC 28230. Black Bank One Of Safest BEEN IN A WRECK? DR. DENNIS WATTS CHIROPRACTIC PHYSICIAN ilr BEATTIES FORD RD. 393-3333 PAIN FROM ACCIDENT MAY NOT START FOR DAYS, WEEKS OR MONTHS AFTER AN ACCIDENT.SEE US ANYTIME YOU ARE IN AN ACCIDENT. YOU ARE ALWAYS WELCOME. WE ACCEPT INSURANCE Money Magazine recently named Mechanics and Farmers Bank one of the safest banks In the nation. Mechanics and Farmers Bank, headquartered In Durham, NC, was one of four North Carolina Banks and the only black- owned bank recognized. Fourteen thousand banks na tionwide were measured accord ing to very stringent financial criteria by Veribanc, a Massa chusetts research firm. The top 175 banks from this study were I I I I I I I I I I I I I I I I I M I I I Local Stocks Of Interest The Charlotte Post's 10/26 10/19 52 week Volumes Dlvld ends Sym Stock Name Exc Close Close dig High Low Close AVG PE Amt$ Yld% BLS Bell South NY 42.13 42.13 -0- 49.63 35.75 3739 6263 12.17 2.36 5.59 CCBF CCB Financial OTC 34.75 34.88 0.34 35.50 32.00 3 30 9.27 1.36 3.91 CAO Carolina Freight NY 27.25 27.13 0.12 20.63 18.00 284 431 29.72 .54 1.98 COKE Coca Cola BoU'g OTC 28.00 30.00 -2.00 34.00 20.25 331 63 -0- .88 3.14 DUK Duke Power NY 47.38 47.25 0.13 49.00 42.25 398 1383 10.72 2.96 6.25 FDO Family Dollar NY 14.25 15.50 -1.25 16.00 8.50 722 738 14.54 .32 2.25 FLD Fleldcrest Can NY 22.88 23.00 -0.12 24.75 14.25 679 500 -0- .68 2.97 FTU First Union OTC 21.25 21.38 -0.13 23.63 20.75 1685 1255 7.70 — — FSV First Wachovia NY 39.50 39.50 -0- 40.75 33.38 458 487 9.87 1.36 3.44 FDLNB Food Lion OTC 10.13 10.25 -0.12 13.50 10.00 538 737 31.06 .06 .59 IBM IBM NY 122.88 124.38 -1.50 129.50 103.25 1.02™ 1503 14.04 4.40 3.58 JP Jefferson Pilot NY 34.13 35.50 -1.37 37.50 25.75 158 474 14.51 1.28 3.75 LNCE Lance, Inc OTC 21.00 18.50 2.50 21.75 16.75 162 260 16.47 .68 3.24 NCB NCNB NY 28.50 28.88 -0.38 29.13 17.50 492 2276 11.97 .92 3.23 NUE Nucor NY 45.00 42.13 2.87 47.00 36.50 522 314 15.45 .40 .89 PNY Piedmont Gas NY 24.38 23.63 0.75 24.50 19.13 92 52 8.09 1.48 6.07 RJR RJR Nabisco NY 85.00 56.75 28.25 87.63 84.50 5.69™ 1777 15.00 2.20 2.59 RSTO Roses Stores OTC 7.50 ' 8.25 -0.75 12.25 7.50 60 37 12.50 .16 2.13 RDK Ruddlck Corp AM 22.13 22.13 -0- 22,88 15.75 5 66 12.16 .57 2.58 S Sears NY 43.75 40.25 3.50 44.00 32.25 1.07™ 1315 10.60 2.00 4.57 SONO Sonoco OTC 29.88 29.75 0.13 33.50 19.50 314 398 15.58 .18 .60 SMI Springs Ind NY 35.25 35.50 -0.25 38.75 27.50 157 215 10.40 1.00 2.84 SNW Stanwood AM 8.00 8.00 -0- 9.13 6.13 6 18 -0- --- --- U US Air NY 37,13 37,50 -0,37 40,00 0.13 833 2286 9,73 .12 .32 [ntere! It Rate Trends Type Rate Term 10/19/88 10/12/8$ 9/21/88 7/20/88 Prime I^le 10.00 10.00 10.00 9.5 Dean Witter CD 1 yr 8.3 8.3 8.5 8.0 Dean Wilier CD 5yr 8.7 8.65 9.10 9.00 T-Bllls 3 mo 7.43 7.27 7.19 6.9 T-Bllls 1 yr 7.58 7.50 7.49 7.71 T-Bonds 30 yr 8.91 8.94 9.02 9.23 GNMA (10 yrAvg life) 10.20 9.98 10.08 10.23 Financial Updates Thomhiiig ATTORNEY GENERAL Lacy Xhornburg... a solid record of leadership, integrity and service. As Attorney General, Lacy Thornburg has been a strong leader in the fight against crime and drugs. He stands up for the law, and he puts the people first. Lacy Thornburg believes that justice should be fair and firm, and he has worked hard to protect the rights of innocent victims of crime. Lacy Thornburg is also the leader in the fight against unfair increases in your utility rates. In everything he does, he’s doing what’s right for the people of North Carolina. Doing what^s right for North Carolina Re-elect Lacy Thornburg on November 8 - paid for by the Thornburg Campaign Committee • Identified by Money Magazine as "superstar" banks for safety. Mechanics and Farmers Bank, headed by Mrs. Julia Taylor, was last year's recipient of the U.S. Department of Commerce's Minority Advocate Award and was 1987 Black Enterprise Bank of the Year. The bank has offices In Durham, Raleigh, Winston- Salem and Charlotte. SUBSCRIBE TODAY 376-0496 Pull Lever 35A NOV. 8, 1988 A VOTE For Charlotte IS A VOTE FOR WILLIE HIELDS SOIL AND WATER CONSERVATION DISTRICT SUPERVISOR Committed • Dedicated • Willing to Serve DeShlelds has a deep love and concern for Charlotte Mecklenburg and it's environment. This coupled with his extensive technical background makes him qualified. Paid lor by the Committee to Elect Willie DeShields I Blended Scolch Whisky, 43% Ale. by Vol., Imported by The Paddington Corporation, Ft. Fee, NJ © 1988. J^B with a twist. J&B Scotch Whi.sky. Blended and bottled in Scotland by .ki.sterini & Brooks, fine wine and spirit merchants since 1749. To send a gift of ,I&B anywhere in the U.S., call 1-800-238-4,373. Void where prohibited.
The Charlotte Post (Charlotte, N.C.)
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Oct. 27, 1988, edition 1
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