A 'surtax' on upper income to pay for health care reform?

[Eric J in MN]

House Dems eye surtax on wealthy for health bill

http://news.yahoo.com/s/ap/20090709/ap_on_go_co/us_health_care_overhaul_57

AP
By DAVID ESPO and ERICA WERNER, Associated Press Writers – 49 mins ago

WASHINGTON – An income tax surcharge on highly paid Americans emerged as the leading option Wednesday night as House Democrats sought ways to pay for health care legislation that President Barack Obama favors, several officials said.

As discussed in the tax-writing House Ways and Means Committee, the surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, they added.

Definition of surtax

From m-w.com:

Main Entry:
sur·tax
Pronunciation:
\ˈsər-ˌtaks\
Function:
noun
Date:
1881
1 : an extra tax or charge
2 : a graduated income tax in addition to the normal income tax imposed on the amount by which one's net income exceeds a specified sum

Why don't they just create a new upper-income tax bracket, instead of a "surtax"?

[DJ13]

1. The only reason I can think of why its not just another, higher tax bracket

A surtax is likely a tax that can be repealed much easier in the future than an additional income tax bracket.

It was likely a deliberate decision made with the usual thought by our ever brave Democrats to get a few Republicans onboard if its sold as a temporary measure.

You're right, an additional income tax bracket would be better, if only because it would be a more permanent way to fund health care.

[lindisfarne]

2. Not so different from a tax on health benefits that exceed a certain value. At the value they were

discussing, the vast majority who got those kinds of health benefits would also have been getting the kinds of salaries where its surtax kicks in. But go with the surtax if it makes people (all but the extremely rich with huge disposable incomes) happier.

[Eric J in MN]

9. Some workers at non-profits have low-pay and generous health benefits.

I prefer keeping health benefits untaxed.

The government should be encouraging generous coverage, not discouraging it.

[sutz12]

3. Hit the CEO's with a 50/50 tax....

Take 50% of everything over $50 million. Gross, not net. Simple, progressive, brutal. :)

[MzNov]

4. Still much less than pre-Reagan years

way back when, when taxes were progressive and the rich paid about 90%

:rofl:

Can't you just see that now? The Nopublicans would all take a powder.

[dysfunctional press]

7. the rich didn't pay about 90%...

the top bracket was about 90%- but with a graduated system like ours, that only applied to a portion of their income.

[MzNov]

10. OK then, 90% was coming from the top bracket

[dysfunctional press]

11. andit wasn't just pre-reagan...it was pre-kennedy.

[madrchsod]

5. no....everyone pays a graduated tax for a universal health care plan

they use the word "surtax" to kill the bill or they are just plain stupid

[Statistical]

6. Agreed making a new name is stupid and will give the R a talking point.

Keep existing tax system bump the highest bracket 3% and second highest 1%.

Done. No special name. Then bombard the media with the fact that it is lower than rate under Clinton or Reagan.

Sometimes I think they don't think.

[safeinOhio]

8. I would think it is all in how you word it.

A short term, a few years, surtax on the super wealthy to pay off, or down the war in Iraq and the war on terror. Of course that would free up the money to pay for health care. You could play the National Anthem and wave flags while making the announcement.

[zorahopkins]

12. Didn't Congress Repeal The Alternative Minimum Tax?

Did Congress recent repeal the Alternative Minimum Tax?

That was (or maybe still is) as tax to make sure EVERYONE (even the rich) pays something.

If that tax was repealed, maybe it is time to bring it back.

If if was not repealed, maybe some thought should be given to lowering the level where the minimum income tax kicks in.