I'm interested in how the Senate health care bill raises taxes to pay for health care differently from the House version. The ever-useful Howard Gleckman at TaxVox has a good breakdown:
Reid proposes $370 billion in new tax revenues over the next decade. $150 billion would come from a 40 percent excise tax on high-cost employer-sponsored insurance. Fees on makers of branded drugs and medical devices and on insurance companies would raise another $100 billion. Boosting the Medicare payroll tax by 0.5 percent on wages in excess of $200,000 ($250,000 for couples) would bring in another $55 billion. Among the cats and dogs: $15 billion from an increase in the floor on deductible medical expenses from 7.5 percent to 10 percent, and $6 billion from an excise tax on cosmetic surgery (the tummy tuck tax).
Reid picked very different revenue sources than the House. It would raise far more in taxes--about $540 billion through 2019. And 85 percent--$460 billion-- would come from a 5.4 percent surtax on incomes in excess of $500,000 ($1 million for couples).
When we see the House/Senate blend in a few weeks, we're going to get a
blend of revenue raisers. I'm with Gleckman here in preferring the
Senate's approach. It's not merely that Reid expands the burden of
paying for reform beyond the $500K crowd, and I feel uncomfortable
merely soaking the rich to pay for our reforms. It's also that his main tax is a policy. The excise tax, as
is a clever way to encourage employers to switch to less expensive
plans and put the savings into their workers' compensation as taxable
income. As for the other taxes, I suppose the Medicare payroll tax increase for the rich is a step toward the inevitable compromise to include some kind of surtax in the final bill. Also, I like me some sin taxes, but a cosmetic surgery tax? Meh.
We want to hear what you think about this article. Submit a letter to the editor or write to email@example.com.