Back in Session in the House
|January 12, 2010||Posted by ITUP under Blog||
The House reconvened on Capitol Hill today, with a promising development that may reconcile the differences in reform financing between the House high-income tax and the Senate excise tax on high-cost insurance. For the first time, lawmakers are considering extending the Medicare payroll tax to go beyond the pay-stub and now include dividends and other investment income for high-income earners.
The current law imposes a 1.45%/1.45% tax on employer/employee, and the Senate bill raises the worker contribution to 2.35% for individuals making more than $200,000 a year and couples making more than $250,000 a year. The compromise will extend the tax to sources such as capital gains, stock dividends, and interest (while excluding pensions and retirement accounts). The Finance Committee briefly considered the idea, finding that 80% of the funds would come from the top 5% of income earners and 64% of the funds from the top 1%. If this idea holds, the compromise will most likely also scale back the limits of the excise tax (though not remove it) and possibly eliminate the high-income tax so as to keep all mechanisms within the health care system.
Following up on yesterday’s Health Insurance Exchange resources, I thought I would include some experienced words from the newly elected California Congressman John Garamendi in a press call today, expressing his (and my) preference for a nationally regulated Exchange:
“Under health reform, 30 million people will buy their insurance through the Exchanges. I spent years as insurance commissioner in California, chasing after the insurance company scoundrels. You’re going to toss 30 million Americans to these sharks unless there is a real strong regulatory environment [like the House’s Exchanges]…
State governments vary in their ability to enforce regulations, and insurance company influence also varies. You can wind up with a commissioner in a state that has no interest in protecting consumers. To deal with that, you need a broad based Exchange that’s strong enough to overcome the insurance companies. That’s the role of the federal government. To make sure the insurance sold is valuable, claims will be paid, and companies will play by the rules.”