Democrats: Tax, Tax, Tax, Tax & Tax

They should have run on the platform "we will turn our experience and your money into our money and your experience". It looks like they are now targeting capital gains taxes to pay for healthcare, even though it's been shown that when you lower the tax, you actually get high revenues.

House Ways and Means Committee Chairman Charles Rangel said lawmakers are considering paying for health-care legislation by imposing a new tax on unearned income such as capital gains, a measure aimed at wealthier Americans.

The New York Democrat, whose panel writes tax law, said the idea of expanding the Medicare payroll tax to cover unearned income was preferable to a Senate proposal backed by President Barack Obama to tax the most-expensive health benefits, which labor leaders say will hurt many workers.

“There’s a big problem in the way the administration wants to pay for this in terms of the tax on the higher premiums,” Rangel, attending a meeting of House Democrats on Capitol Hill, told reporters last night.

Rangel said he’ll discuss how to pay for the legislation, which calls for the biggest overhaul of U.S. health care in more than four decades, during a meeting at the White House today with Obama.

He said the tax on unearned income would be “comparable to the surtax” that House Democrats want to impose on the highest- income people. The House health-care bill calls for a 5.4 percent income tax on singles who earn more than $500,000 and couples who make more than $1 million. “It covers the same people,” he said.

House and Senate Democratic leaders are trying to merge their versions of the legislation, which may cost $1 trillion over 10 years. House Speaker Nancy Pelosi and Senate Democratic Leader Harry Reid are also scheduled to meet today at the White House with Obama to discuss the state of negotiations, a Democratic congressional aide said.

Capital Gains Tax

How to pay for the bill looms as the biggest stumbling block. Negotiators are considering expanding a 0.9 percentage point increase in the payroll tax that funds the Medicare program for the elderly. The Senate measure would apply that tax increase to individuals earning at least $200,000 a year and couples earning $250,000 and more. The tax has always applied just to salaries, not unearned income.

While some Senate Democrats oppose the House’s millionaire tax, Pelosi told reporters last night she hasn’t given up on it because “it’s the best pay-for we’ve had so far.”

The proposal to impose an excise tax on the most-expensive employer-provided health benefits has drawn fire from Democratic-leaning labor unions, who say it would bring financial burdens to middle-class Americans, including workers who traded wage increases for greater health-care coverage.