Now that Democrats postponed the imposition of the luxury tax on the Cadillac insurance plans of labor union members, they are scammering to replace the lost revenues in order to keep their promise of deficit neutral healthcare reform.
Mike Godfrey of TaxNews.com reports that Congressional Democrats are considering the imposition of an additional tax on passive investment income:
Senior Congressional Democrats are exploring the option of imposing extra tax on investment income to partly fund the cost of health care reforms, estimated at $1 trillion, as House and Senate leaders continue their attempts to iron out differences on how the proposals should be paid for.
Speaking to reporters shortly before a meeting of House Democrats on January 13, Charles Rangel, the New York Democrat who chairs the House Ways and Means Committee, which has jurisdiction over tax legislation, explained that a proposal to extend the Medicare payroll tax to income such as capital gains, dividends, rents and royalties is preferable to an excise tax on high-cost “cadillac” health insurance plans favored by Democrats in the Senate.
The additional tax on investment income is seen by House Democrats as an acceptable compromise because it would be less regressive and affect mainly wealthy taxpayers.
The House version of the legislation is paid for in part by a contentious “surtax” of 5.4% on individuals and couples with annual income of $ 500,000 and $ 1 million respectively. This proposal has drawn much opposition in the Senate and has not been included in its version of the health care bill.
House and Senate leaders must resolve their differences on the varying aspects of the legislation before it can be signed into law by President Obama.
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