WASHINGTON, July 9, 2009

House Dems Plan Tax to Pay for Health Care

Overhaul Draft to Include 3.5 Percent Income Tax Surcharge on Highest Earners, but No Final Decision Reached Yet

  • The proposed surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, according to officials involved in the discussion

    The proposed surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, according to officials involved in the discussion  (CBS/iStockphoto)

(AP)  House Democrats working on President Barack Obama's goal of health legislation are narrowing in on an income tax surcharge on the highest-paid wage earners to help subsidize insurance for the 50 million people who lack it.

Pushing to complete a comprehensive health care overhaul plan by Friday and bring it up for committee votes next week, House Democrats abandoned earlier money-raising proposals, including a payroll tax. They met behind closed doors Thursday to fine-tune the details.

Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, said he expected to have a draft bill on Friday.

"The leadership's doing meetings with lots of members to hear their concerns, talk it through. But legislation doesn't come together until we actually start working on specific amendments on specific language and that's what we'll do next week," said the California Democrat.

"I promised the president that we would have legislation out of the House before we went on an August break. That is still my goal," House Speaker Nancy Pelosi said Thursday.

The action in the House stood in contrast to the Senate, where Democrats edged away from their goal of passing health care legislation by early August amid heightening partisan controversy over tax increases and a proposed new government role in providing insurance to consumers.

As discussed in the tax-writing House Ways and Means Committee, the surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, according to officials involved in the discussion. Most spoke on condition of anonymity because the talks were private.

Rep. Shelley Berkley, D-Nev., a member of the panel, said the panel is looking at a surtax around 3.5 percent.

In addition, key lawmakers are expected to call for a tax or fee equal to a percentage of a worker's salary on employers who do not offer health benefits.

Ways and Means Chairman Charles Rangel, D-N.Y., has said his committee needs to come up with $600 billion in new taxes to deliver on Obama's goal of sweeping changes to the nation's health care system to bring down costs and cover the 50 million uninsured. Hundreds of billions of dollars more would come from cuts to Medicare and Medicaid to pay for legislation expected to cost around $1 trillion over 10 years.

Lawmakers cautioned that no final decisions have been made. Smaller tax options remained possibilities, depending on the overall cost of the legislation, including a tax on sugared soft drinks and ending a tax break that drug companies receive for advertising.

In the Senate, New York Democrat Chuck Schumer told The Associated Press that he believes the "ultimate goal" is to have a bill by the end of the year that is signed into law by the president.

Separately, Republicans who met Wednesday with Senate Majority Leader Harry Reid, D-Nev., said he expressed flexibility on the timetable, indicating that he was willing to allow more time before legislation is brought to the floor.

Failure to meet the August goal would be a setback - but not necessarily a fatal one - for Obama's attempt to achieve comprehensive health care legislation this year. A group of Democratic and Republican senators led by Finance Committee Chairman Max Baucus, D-Mont., is still trying to work out a bipartisan deal.

But the Finance Committee work appeared to have suffered a setback when Reid relayed concerns to Baucus about the compromise taking shape. Finance's proposal was expected to omit a new government insurance option to compete with private insurers - something Republicans oppose but most Democrats favor. A leading contender to pay for the measure was a new tax on employee health benefits, which Obama campaigned against and many Democrats oppose.

Pelosi made clear Thursday that whatever the Senate comes up with, the House bill will have a public plan and will not tax benefits.

"We will not be taxing benefits, health care benefits in any legislation that comes from the House," Pelosi said.

"And it will have, coming out of the House, a public option," she said. "The only debate on that is what it will be called: a patient option, public option. Write in your suggestions."


© MMIX The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Add a Comment
by GiveMeFreedom July 9, 2009 5:26 PM EDT
Let's see. Top U.S. tax rate is 35%. Social security and medicare is 7.65% on first 105,000 then 1.45%. Now they want 3.5% more for this. On 1.1.2011 the top rate goes up another 4.6%. If you live in NYC you have around 15% for state and city income tax. So excluding all of the state sales tax, real estate taxes and other local taxes, your income tax if you make over $400,000 in NYC (which is not a lot in that city) will be pushing 60% in 2011.

Does that not sound like too much to you?
Reply to this comment
by ffaye July 9, 2009 4:21 PM EDT
WE NEED HEALTHCARE REFORM NOT GOVERNMENT RUN HEALTHCARE
Get the government out of our lives as much as possible.
Don't tax me are anyone else excessivly to pay for insurance for people who do not choose to get insured. We already have Medicare and Medicade who pay for citizens in need. Reform these systems and stop the BS.
There are clinics in my state (which is one of the poorest in the US) who offer healthcare including eye and dental care based on your income. If you need hospital care the State University Medical Center helps with these patients. In one area there is a group of Drs. who donate there services to see needy pts. Help is available but you have to seek it. I have utilized these clinics when I have been without coverage and could not afford a drs visit. Don't tell me we need to spend trillions of dollars to care for our citizens.
Drug companies will give meds free of charge to needy patients.
There is alot of folks who could get help but it takes leg work to fill out applications and prove your need. I don't want to pay healthcare for drug dealers and non citizens.
I pay for health coverage instead of using the money for entertainment and other non essentials. For the cost of a cell phone bill some people could pay for insurance but choose to have a cell phone with fancy ring tones ect. instead of insurance. Give me a break Washington!!!!!!!!!!!!
Reply to this comment
by Joe_NY_15 July 9, 2009 4:05 PM EDT
Is there any more evidence of the Tax and Spend Liberal Democrats !!!

More taxes.....I hope they know that you eventually run out of other people's money.
Reply to this comment
by Motherhoodproudprofession July 9, 2009 4:03 PM EDT
What is so magic about $250 thousand for couples and $200 for singles? ESPECIALLY THE COUPLES who usually have kids and college tuition and mortgages and braces and property taxes and insurance, and are being squeezed like crazy from all directions anyway. When you make close to that all of the deductions seem to disappear. More and higher taxes on the "wealthy" will make them unable to meet their tax burden. Who will pay then?! This isn't as much money as it sounds like!
Reply to this comment
by ffaye July 9, 2009 3:56 PM EDT
BIG LIES TO GET AN AGENDA PASSED
White House Claim of 46 Million Uninsured 'Americans' Includes Almost 10 Million Foreigners
27 million Americans have annual
incomes over $50,000 (10 million
of these have an annual income
over $75,000)?they can afford
health insurance, but choose not to
purchase it;
?
14 million are eligible for government
welfare coverage through Medicaid
or SCHIP, but they have not signed
up; and
Two-thirds?over 31 million?are
between the ages of 18 and 34.
Overall, only about eight million
Americans?less than three percent of
the U.S. population?are chronically
uninsured for two years or Go to this link and click on a great primer for great info. http://www.iwf.org/inkwell/show/20513.html
http://www.cnsnews.com/Public/Content/Article.aspx?rsrcid=49586
http://online.wsj.com/article/SB124579852347944191.html
http://www.cnsnews.com/Public/Content/article.aspx?RsrcID=49986?We have young people between 18 and 30, probably about another 10 million or so, they?d rather buy applications for their iPhone than buy health insurance,?
Reply to this comment
by beaumuff July 9, 2009 2:05 PM EDT
I read an artical this morning that there were not enough people making over $250 thousand to pay for this massive spending plan. Only way to do was to raise everybodies taxes. So the final out come is if you pay for yours now, be prepared to pay somebody elses.
Reply to this comment
by USA_is_back July 9, 2009 2:42 PM EDT
Where exactly did you read this article? Drudge Report? Fox News Editorial page? Sarah Palins twitter? Not very reliable without a source.
by beaumuff July 9, 2009 2:49 PM EDT
No it was on MSN, and anybody that can think knows its true. No other way to pay for it but tax. No need to try to get ahead in this country anymore,Obama will take care of everyone.
by GiveMeFreedom July 9, 2009 3:16 PM EDT
USA - you are just a prick. Sorry if you do not like Drudge or Fox. Then go ahead and watch MSNBC or CBS and enjoy the drivel you are fed.

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