Income tax surcharge aired to fund health care
WASHINGTON — An income tax surcharge on highly paid Americans emerged as the leading option Wednesday night as House Democrats sought ways to pay for health care legislation that President Obama favors, several officials said.
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, they said.
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.
Rep. Shelley Berkley, D-Nev., a member of the committee, said the proposed surtax on high-income taxpayers appealed to her and others as a way to avoid a “nickel-and-dime” approach involving numerous smaller tax increases. She added that other earlier options had fallen away, including an increase in the payroll tax.
Berkley and others cautioned that no final decisions have been made, either by the tax-writing committee or by the Democratic leadership, which hopes to have legislation drafted by Friday and through the House by month’s end.
The surtax surfaced a day after the Senate Democratic leadership made it clear it viewed a proposed tax on high-end health care benefits as unacceptable, at the same time it relayed word that it favors allowing the government to sell insurance to consumers.
Meanwhile, Senate Democrats edged away from their goal of passing ambitious health care legislation by early August amid heightening partisan controversy over the health care benefits tax and government health insurance.
“I think the ultimate goal is to have a bill by the end of this year” that is signed into law by the president, Sen. Charles E. Schumer, D-N. Y., said in an interview with the Associated Press. He said Democrats would make “every effort to stick to the timetable” that included initial Senate action by August.
Separately, Republicans who met with Senate Majority Leader Harry Reid, D-Nev., said he expressed flexibility on the timetable, indicating he was willing to allow more time before legislation is brought to the floor.
The evident slippage coincided with a formal announcement that the nation’s hospitals had agreed to give up $155 billion in projected Medicare and Medicaid payments over the next decade, money that can help defray the cost of the legislation the administration wants.
“Folks, reform is coming. It is on track,” Vice President Biden said at the White House, urging the Senate to enact legislation by the August goal.
In another development, Rep. Henry Waxman, D-Calif., said he had been assured by the administration that it was not bound by an $80 billion agreement with the pharmaceutical industry that Obama announced with fanfare at the White House last month.
Waxman, chairman of one of three committees with responsibility for the House legislation, did not say if the same were true of the deal with hospitals.
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