Lawmakers dilemma: should tax increases pay for health care overhaul?

As lawmakers disagree over which taxes to raise to pay for health care reform, they "also face another problem: They're confronting the fear that's made it hard to raise taxes for more than 30 years.

Republicans and moderate Democrats think that any tax increase is political poison back home," McClatchy Newspapers reports. "Republicans are pouncing on Democrats, charging that the party is eager to add a new tax burden to already-strapped constituents in the midst of a recession. … The current House Democratic plan would raise an estimated $543.9 billion over 10 years by imposing what it calls a "graduated surcharge" on higher-income earners." One criticism of the proposal is that "small businesses will be hurt. Surcharge backers cite data from Congress' Joint Committee on Taxation that indicate that 96 percent of small businesses wouldn't be affected."

"Another problem, said Sen. Kent Conrad, D-N.D., is that selling the surcharge as part of a health care overhaul is tough, because it's hard to explain to constituents how raising general tax rates affects health care. For all these reasons, said Sen. Olympia Snowe, R-Maine, 'the surcharge is not even on the table here,' in bipartisan negotiations among members of the tax-writing Senate Finance Committee"  (Lightman, 7/30).

The Wall Street Journal's Health Blog reports that "Americans are still OK with the idea of taxing rich people to pay for part of the big health-care overhaul now being debated in Washington. In the latest WSJ/NBC poll, 68% of respondents said raising taxes on families making more than $1 million a year was an 'acceptable' option" (Goldstein, 7/30).

Related: KHN's Julie Appleby examination of insurance tax options.


http://www.kaiserhealthnews.orgThis article is republished with kind permission from our friends at The Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery of in-depth coverage of health policy developments, debates and discussions. The Kaiser Daily Health Policy Report is published for Kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. Copyright 2009 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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