That's what we face if Congress passes health care
"reform." At least Charlie Rangel of the House Ways
and Means Committee seems somewhat honest in this regard.
His committee has issued a paper listing different options for
raising $600 billion.
Reports National Journal:
The Ways and Means option would raise more than half the needed
revenues from limiting the tax exclusion for employer-provided
benefits to 110 percent of the actuarial model of the Federal
Employee Health Benefit Blue Cross/Blue Shield standard option.
Coverage excluded from tax would be limited to $17,240 for
families and $6,800 for individuals beginning in 2013, indexed
for inflation in future years with a 50-50 blend of general and
medical inflationary increases. That option alone would raise
$306 billion.
The Ways and Means paper assumes the entire $600 billion in new
taxes would begin to take effect on Jan. 1, 2013. A 2 percent
surtax on individuals earning more than $200,000 and households
with $250,000 or more in adjusted gross income would raise $256
billion.
That would be in keeping with President Obama's pledge not to
raise taxes on all but the wealthiest households, and the 2013
effective date assumes the nation would be out of recession.
But many small-business owners are already chafing at seeing
the top tax rates hiked to 36 percent and 39.6 percent in 2011
under Obama's budget plan.
Rangel's paper couples the 2 percent surtax with a 0.375
percent increase in the Medicare tax on both employers and
employees, estimated to raise $344 billion -- also likely to
cause problems with the small business lobby and perhaps
liberal interest groups that argue it is a regressive tax.
Currently, employers and employees each pay a 1.45 percent tax
to fund Medicare; the 1993 budget bill repealed the cap on
income subject to the Medicare tax.
The options paper appears to recognize that raising the
Medicare tax might be politically untenable. If that is the
case, as a fallback the Ways and Means document suggests a
number of revenue-replacing options, including limiting the tax
exclusion and a $200 billion proposal to add a new 3 percent
payroll tax on employers' healthcare spending. The paper argues
that employers would essentially come out even, because they
would be saving money on employees' health care under the
overhaul bill.
President Barack Obama's promise about not raising taxes on most
Americans looks increasingly tattered. But then, it's hard
to believe that anyone ever took that promise seriously.
