Demos Want Higher Tax On Wealthy For Health Care

Wednesday, Jul 15,2009, 1:47:52 PM Click:

WASHINGTON (MarketWatch) - House Democrats intend to pay for their health care reform plan with tax increases on wealthy Americans.

A tax on the rich is the "best way" to raise money for the revision, Rep. Charles Rangel, Democrat of New York who is chairman of the House Ways and Means Committee, said late Friday.

The House Democratic proposal, which includes a public insurance scheme should be formally unveiled Monday.

It faces an uphill battle, because even many Democrats are concerned about the political impact of rising taxes.

House Republican leader John Boehner, R-Ohio, said the tax plan would be a "job-killer."

"House Democrats have finally made clear that they will fund their government takeover of health care by raising taxes on hard-working American families and small businesses in the midst of one of the worst recessions in recent memory. With unemployment nearing double digits nationwide, the last thing we need is a massive tax hike that will punish small businesses and cost even more American jobs," Boehner said in a statement.

President Obama promised during the campaign not to raise taxes on Americans earning less than $250,000 per year.

Obama was heading back to Washington over the weekend from a foreign trip that included the Group of 8 summit in Italy. He is expected to wade into the health-care debate upon his return.

Progress on health-care legislation has stalled over the central issue of who will pay for the changes.

Rangel told reporters that the tax could start in 2011.

Married couples $ 350,000 would pay a surcharge of 1%. The surcharge would increase for families with higher incomes.

The tax is to raise $ 500 billion, about half the price of health care reform. The rest of program costs from savings, officials said.

The rate is set to go higher in the years to come. But the increase could not come into force if other means to pay for the health plan are.