Reid's option: Individuals earning more than $250,000 a year to pay a modest increase in payroll tax

Nov 13 2009

Senate Majority Leader Harry Reid reportedly is moving closer toward a progressive way to fund quality, affordable health care for all.

The Associated Press late Wednesday reported that one of the options Reid has under review is asking individuals who earn more than $250,000 a year to pay a modest increase in the payroll tax that goes to Medicare. This measure would bring in needed revenue to pay for comprehensive health care reform, but also would be consistent with President Obama's promise not to raise taxes on individuals earning less than $250,000 a year.

The House, in part, funds health care reform by applying a 5.4 percent surtax on income above $500,000 for individuals and $1 million for couples.

"This would mean a significant shift on the part of Senate leadership," said USAction Program Director Alan Charney. "It would move the Senate leadership closer to the House. The Senate would be asking the very wealthiest Americans who have enjoyed tax cut after tax cut over the past eight years to pay their fair share. That's the only we are going to finally realize the dream of quality, affordable health care for all with a public health insurance option."

USAction earlier this year, along with coalition partners Citizens for Tax Justice and SEIU, called for a set of progressive revenue measures to fund health care reform. These measures included a surcharge on the wealthiest one percent of Americans, reforming the Medicare tax and limiting itemized deductions.

SOURCE USAction