House Health Bill Slaps 5.4% Tax on Top Earners

By PATRICK YOEST and MARTIN VAUGHAN

WSJ

Associated Press

House Speaker Nancy Pelosi, from left, stands with House Democratic leaders Steny Hoyer, Pete Stark, Henry Waxman, Charles Rangel, and John Dingell to announce health-care legislation on Tuesday.

WASHINGTON -- House Democrats Tuesday proposed new taxes on the wealthy to help fund an expansion of government health benefits. But the bill also includes a mechanism to peel back the tax increases if the revenue isn't needed to fund the bill.

The bill would place a 5.4% surtax on individuals and families with annual gross income exceeding $1 million. Individuals and families with annual income between $350,000 and $500,000 would face a 1% surtax, and those making between $500,000 and $1 million a year would be hit with a 1.5% surtax.

Those surtaxes for the last two categories would jump to 2% and 3% by 2013, unless the director of the White House budget office determines that other provisions of the bill have resulted in savings to the government of more than $150 billion. Democrats say new programs for preventive care, for example, will achieve savings that aren't counted upfront by the Congressional Budget Office.

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