House seeks to pay for reform with new tax on wealthy

Jul 14 2009

House Democrats are expected to begin marking up a health reform bill this week that members of the Ways and Means committee said "would cost less than $1 trillion over 10 years, [and would be] paid for chiefly by a combination of spending reductions in the health care system and a surtax on wealthy taxpayers," CQ Politics reports.

"The surtax would be levied beginning in 2011. … [T]here would be three income brackets - $350,000, $500,000 and $1 million for couples filing jointly, and $280,000, $400,000 and $800,000 for individuals - with a different rate at each level: 'One, two, three [percent] - something like that,'" the committee's chairman, Charles Rangel, D-N.Y., said (Wayne, 7/13).

"The Obama administration is open to the idea of taxing the wealthiest Americans to pay for healthcare reform, health secretary Kathleen Sebelius suggested yesterday as the House of Representatives prepares to incorporate such a plan in its draft healthcare bill," the Financial Times reports. Though the plan's drawn fire from Republicans, the administration views it as one possibility for paying for reform, which officials hope Congress will address before its August recess (O'Connor, 7/12).

Meanwhile, Senate leaders, including some Democrats, played down the tax idea on Sunday's talk shows, Congress Daily reports. Senate Majority Whip Richard Durbin, D-Ill., said, "I think we're going to have a different approach, while Sen. Kent Conrad, D-N.D., said "I don't think the House proposal as I've heard it will be what's part of the final package." Durbin's Republican counterpart, Jon Kyl, R-Ariz., said the plan "would be exactly the wrong thing to do any time, but especially when we're in the middle of a recession" (Hunt and Dick, 7/12).

However, senators continue to consider other options for raising taxes elsewhere, Bloomberg reports. Durbin also said in his Sunday talk show appearance, that the bill must "combine cuts in actual spending on health care, savings from hospitals, from doctors, from health insurance companies, along with some new revenue" (Del Giudice, 7/12).

As the public watches the debate take shape in Congress, polls show that Americans are anxious about the high costs of medical bills and premiums, even as Congress focuses on finding ways to pay for expanding access, the Los Angeles Times reports. "[T]he debate in Washington has been dominated by how to raise hundreds of billions of dollars -- by tax increases, if necessary -- to ensure that almost everyone has medical insurance. That emphasis is stoking fears that a historic opportunity to reform the system may be missed" (Levey, 7/13).