Friday, July 10, 2009

Finally! Dems to Tax the Rich to Pay for Health Care!

After debating all sorts of convoluted taxes on health care benefits (that would have doomed the Dems to defeat in 2010), Charles Rangel's Ways and Means Committee has finally decided to do the obvious: tax the rich to pay for health care.

Let's face it: The rich have more money, so they're an obvious source of revenue:

Democrats on the tax-writing Ways and Means Committee agreed to a new surtax that would start with households making $350,000 a year and begin in 2011, said the committee's chairman, Rep. Charles Rangel, D-N.Y.

It would raise some $540 billion over 10 years, about half the cost of Obama's ambitious plan to reshape the nation's health care system and provide care to the 50 million uninsured. However, lawmakers could not provide an exact price tag of the overall bill.

( . . . )

Rangel said the new surtax would be graduated, starting with households at $350,000 and then rising at $500,000 and again at $1 million. Cuts to Medicare and Medicaid would raise about $500 billion, according to the Congressional Budget Office. Fees paid by companies who don't provide insurance to their employees would push the amount of the bill even higher.

"Instead of putting pieces of different revenue raisers together the best we can do is a graduated surtax," Rangel said.

Rangel didn't describe details, but one official said the surtax would apply to individuals with adjusted gross incomes over $280,000 a year, and couples over $350,000. A senior House aide said the surtax would be 1 percent for the first group of high earners, those households making $350,000 or more. The levels for the other two groups, those above $500,000 and $1 million in annual income are still being determined, said the aide. Yahoo News

Duh. Why try to cobble together a dollar here and a dollar there when there are all of these rich people who don't know what to do with their money, and whose tax rates are perhaps 15% less now than they were in 1980, not including the offshore accounts that hide all or most of their wealth, some of them, from being taxed at all. With this source of revenue, EVERYONE who lacks care can be covered.

It's an obvious fix and it increases both the likelihood that health care will get passed and the likelihood that that vast majority ofAmericans will support the funding stream for it - taxing the rich - in the future, with no "shoot ourselves in the face" tax Democratic increases on the working poor and middle class.

Of COURSE Republicans are saying that tax increases should be related to health care, so that they can campaign in 2010 saying that DEMOCRATS voted to increase the cost of health care. Democrats would be well advised to ignore this unfriendly advice and consider the source instead of accepting it at face value.

Earlier, there was a boneheaded "proposal to tax soda" and other sugary drinks, which would have been a regressive tax because the poor spend more of their income on soda than the rich do. If you tax bottles of Coke and Pepsi, you might as well put a special tax on sex and Hamburger Helper; the real bill would come due for Democrats on election day.

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