In the view of a number of experts, the new Health Care legislation will not be kind to investors or taxpayers. The take home pay of all Americans will be cut as taxes increase and many are forced to buy insurance.This, in iteself is likely to be a drag on the stock market, but worse yet are the higher taxes on capital gains and dividends. While we may not feel sorry for the "rich", who earn at least $200,000 a year, the negative impact on stocks will hurt everyone.  The capital gain rate will jump top to 20%, as will the tax on dividends. This represents an increase of 33%. Then, in 2013, there is a new 3.8% Medicare surtax on unearned income . Combining all these, the total increase is 58.6% over current rates. Real estate investment trusts, which distribute both rental income and dividends will likely be hit hard by these changes, the last thing that the Real Estate sector needs.

There is a general fear that many will sell stock holdings to hold on the 15% rate on gains, exerting downward pressure on stocks. Other provisions of the law will potentially reduce the benefits of a number of tax advantaged vehicles. For the longer term, there is general concern that the massive bill will increase the size of the federal deficit in the next ten to twenty years. Are the experts right? Is the party line of the administration, that the deficit will shrink and costs will actually go down, correct? We will see, but anyone who stands to be impacted by the law should be analyzing the potential impacts. In future columns we will look at the impact on health insurance.