Reid Eyes Payroll Tax Hike On Wealthy Americans

WASHINGTON — Majority Leader Harry Reid is considering a plan for higher payroll taxes on the upper-income earners to help finance health care legislation he intends to introduce in the Senate in the next several days, numerous Democratic officials said Wednesday.

These officials said one of the options Reid has had under review would raise the payroll tax that goes to Medicare, but only on income above $250,000 a year. Current law sets the tax at 1.45 percent of income, an amount matched by employers.

It was not known how large an increase Reid, D-Nev., was considering, or whether it would also apply to a company's portion of the tax. President Barack Obama has said he will not raise taxes on wage earners making less than $250,000.

The officials spoke only on condition of anonymity, saying they were not authorized to disclose details of private deliberations.

Reid's spokesman, Jim Manley, declined comment and said the majority leader has made no final decisions and is awaiting detailed information from the Congressional Budget Office about the cost and coverage implications of the proposals he has drafted.

Reid sent his proposals to the CBO more than two weeks ago and recently took the first step on the Senate floor to begin a debate on health care as early as next week.

The House passed its version of the legislation late last week on a near party line vote of 220-215, a victory for Obama as well as his allies in Congress.

In general, the House-passed measure and the one Reid is expected to propose are designed to expand coverage to tens of millions of uninsured, eliminate insurance industry practices such as denying coverage on the basis of pre-existing medical conditions, and slow the overall rate of growth in health care spending nationally.

Reid has been merging bills cleared earlier by two separate committees but has a virtual free hand in the bill he crafts.

On one contentious issue, he has already said his measure will include an option for consumers to purchase health care from the government as a way to create competition with private companies. States could drop out of the system.

The House bill is significantly more generous in providing subsidies to help lower-income individuals and families afford coverage, and Reid is under pressure to find additional financing. Additionally, a Senate Finance Committee-approved proposal to tax very high-cost insurance policies has drawn criticism from organized labor, which wants it either modified or dropped altogether.

The House-passed legislation includes a surtax of 5.4 percent on income above $500,000 for individuals and $1 million for couples, a proposal that has drawn little if any backing in the Senate.

The House's passage of a health care bill was marked by last-minute controversy over abortion, the result of far-reaching restrictions that foes of the procedure succeeded in inserting into the measure. No government-run insurance plan could cover abortions, except in cases of rape, incest or if the life of the mother were in danger. Nor could any health plan provide abortion coverage except for those three exceptions if any of its customers received federal subsidies.

Obama has called for changes to ease the restrictions, and it was not known what the impact of the House-passed bill would have on the Senate. Officials have said Reid was ready to propose that individuals receiving subsidies would be able to buy abortion coverage with their own funds.

Comments

[OOOOOMY]

From obama's lips...there is the possiblity that anyone not opting for his National Healf Reform Bill, could face jail....We all want reform...but by only a Democratic Reform, behind closed doors, and no transparancy whatsoever...All this rush and crisis for everything! Placing us all trillions upon trillions of dollars into debt
Just look what this administration's power has become.... they strong armed the banks to give out stupid loans to many that clearly could not afford. They are controlling salaries in the private sector, they have taken over major auto makers...etc. They support efforts trying to stop secret ballots, Trying to manipulate the census with Acorn groups...and so much more...Are not any Obama supporters have any concerns....Just look all around you.

[Name Not In Use]

You cannot tax the wealthy with any form of payroll tax. The wealthy simply do do get their money from a "payroll".

The simplest and most efficient way to tax the wealthy is with a "wealth tax". Indeed, it is so efficient and effective that no politician will even dream of the concept.

Switzerland has an annual wealth tax of 1.5 percent.

[NoFactsJustTruth]

We should at a minimum return to the exact tax rate and structure that existed when Clinton left office, as ANY promised economic boost from Bush tax-cuts to the wealthiest were a LIE.

I'd also like to see added on top of that a return to 'double' OUR country's previous highest ever Transfer Tax rate; a negligible tiny fee to the small and moderate investor - it would restore a FAIR tax on the institutional investors and would largely tax exactly the type companies that required taxpayer bailout. This tax could be used to pay back the Treasury EVERY dime of TARP or any other bailout monies that were lent 'first', and then forever be held in Trust thereafter against any future 'too-big failures'.

[itys]

I think America CANNOT wait for this man to be booted from the Senate next year. With the health care bill dragging the country down further into debt, this will all but cinch a loss for Prince Harry come next November. Thank G0D.

[Don Quixote]

How much money do you really need? You can only be in one place at one time. At a certain point, every addional dollar you rake in comes off the back of someone else.

Oh yeah. Ok. I know, I know. You're talented and gifted and hard-working and diligent and all that, but you have to admit, there was also an element of luck involved. No one's saying you can't be rich and you don't deserve to have a better lifestyle that those less talented, less diligent and/or less fortunate, just that at a certain point, you're hurting them

I don't know what that number is, but it seems to me that if you have more than a few tens of millions of dollars, or maybe it's a hundred mill., then any additional amount has to come at the expense of others, and should therefore be highly taxed. The pie is only so large at any point in time, and you're just taking more than your share. You can still keep the tens or hundreds of millions you made, I'm just talking about a nice fraction of the additional amount that you'll hardly notice missing. Like I said, you can only be at one place at one time.

Trust me, boosting up the society you live in will make you richer in more ways than one, so you should be for more wealth taxes for purely selfish motives.

[brady61995]

well said

[CommunistUtopia]

Sounds like you have more time and money than you need. You should give me your money.

[JamesOctopus]

Yes! YESSS!

[dems08]

article writer: DAVID ESPO

per mediamatters.org:

'AP uncritically quoted McConnell's claims that health reform means "massive cuts to Medicare," "taxes on small business"'

In an August 18 APs article, DAVID ESPO quoted Sen. Mitch McConnell's claim that health reform proposals will be paid for "through massive cuts to Medicare," without pointing out, as FactCheck.org did, that "[t]he claim that Obama and Congress are cutting seniors' Medicare benefits to pay for the health care overhaul is outright false."

Additionally, DAVID ESPO quoted McConnell's assertion that health reform will be funded through "taxes on small business," without noting that according to House Democrats, the nonpartisan Joint Committee on Taxation concluded that only 4.1 percent of small businesses would be affected by the surtax in the House Democrats' health reform bill or that the Senate HELP bill provides credits to help small businesses comply with the mandated coverage provisions.

http://mediamatters.org/research/200908180032

[dems08]

Senator Reid:

Non-riche Americans approve...

JUST DO IT!

[brady61995]

go reid do it. repeal scrubs tax haven and take back america on @ss at a time.

[humanbeing-rick]

This is exactly the types of solutions we need, way to go Senator Reid! Lead the way!
I would suggest a sliding tax rate, that increases with income above $250K.
Start at say 5% @ $250K through 50% @ $2.5M

Of course, this must be done along with repealing the Bush tax cuts for the wealthy, close all tax loopholes and off shore tax havens, etc.

If we do this, and end a couple of wars, we could invest in America, and bring us back to prosperity again.

[NWBrunette]

First, eliminate the Reagan tax cuts. Then eliminate the Bush tax cuts. Right there is way more than enough dough to pay for the wars, have universal health care, put civics education back in to the public schools, and have some left over for a middle class tax cut.

[BocaMom]

I wish Reid and the Congress would focus on the economy and getting 15 million Americans back to work instead of more taxes! It's scary out there and nobody in Congress seems to care about us!

[madisonhack]

We should start by just repealing the Bush tax cuts on the wealthiest Americans. There are other ways of generating income that aren't regressive, such as increasing the tax on stock transactions to what the European exchanges charge....we already have the lowest rate in the world, by far.

Those two things would completely fund Social Security, Medicare, and a Single Payer health plan.

Any questions?

[dems08]

fanned!

[madisonhack]

You made some great music. Fanned back.

[SkookumJohn]

Well this is great news for all us working stiffs who get paid on a W-2. Now instead of paying twice the tax rate of moneybags coupon clippers like Teresa Heinz Kerry and Warren Buffett and the Kennedy parasites, it'll be closer to three times as much.

[CommunistUtopia]

These politicians always want to "only" tax the rich and cigarette smokers and oil companies. Apparently, those groups pay for everything.

Reid may want to "move to the center" or he is in his last few days in the Senate. Personally, I will love seeing him out of there.

[JCCross]

Flat tax! Flat tax! Flat tax!

[madisonhack]

That's regressive.