CQ HEALTHBEAT NEWS
July 14, 2009 – 4:20 p.m.
Groups Voice Support for Surtax on Wealthy Americans to Fund Health Overhaul
By Emily Stephenson, CQ Staff
The wealthiest Americans should pay for a health care overhaul to compensate for disproportionately benefitting from tax cuts under the Bush administration, a former investment banker who says he falls into that high-earning category said Tuesday.
Eric Schoenberg, now a private investor and professor at Columbia University, said in a conference call with reporters that the tax cuts set to expire in 2010 most benefited the top 1 percent of taxpayers, so paying for overhaul legislation would be an appropriate contribution.
Legislation introduced Tuesday by the Democratic chairmen of three House committees would create a 5.4 percent surtax on annual income above $1 million for married couples and $800,000 for individuals (See related story, CQ HealthBeat, July 14, 2009).
The House bill sets the surtax, which would take effect in 2011, at 1.5 percent for couples making between $500,000 and $1 million and 1 percent for couples between $350,000 and $500,000.
“My view is that in hard times it is important for Americans to come together and unite over the idea that medical care ought to be a basic right of citizenship,” said Schoenberg. “It’s only fair for those of us who have benefited the most from this system to contribute the most.”
Schoenberg participated in the media call as a member of Wealth for the Common Good, a network of wealthy individuals that supports “shared prosperity and fair taxation,” according to the group’s Web site. Bob McIntyre of research and advocacy group Citizens for Tax Justice and Alan Charney, program director of advocacy group USAction, also participated.
The three said their groups would support the surtax or President Obama’s suggestion of limiting benefits from itemized tax deductions. Both would target top earners, according to reports by Citizens for Tax Justice.
McIntyre said his group also has proposed extending Medicare taxes to cover unearned income, such as capital gains and stock dividends, and introducing a higher tax on annual incomes of more than $200,000. McIntyre said this plan — which he said has gotten attention in the Senate — would result in wealthy Americans paying for most overhaul costs.
“Asking those who make the most to chip in a little more is perfectly reasonable,” he said.
Citizens for Tax Justice’s reports — the latest of which was released Tuesday — explore all three proposals and their impacts on residents of each state.
Republicans have pushed back sharply against talk of using a surtax to fund an overhaul.
House Republican Whip Eric Cantor of Virginia said last week that a surtax would hurt small businesses and stifle job creation, something to avoid while the United States continues in an economic recession (See related story, CQ HealthBeat, July 13, 2009).
Citizens for Tax Justice found that the surcharge would affect 5 percent of small businesses. But McIntyre said since the surcharge would apply to business profits after wages are paid, the extra tax shouldn’t discourage small business owners from hiring.
Members of the fiscally conservative Blue Dog Coalition also have expressed concerns about using sources outside the health care system to pay for the overhaul (See related story, CQ HealthBeat, July 10, 2009).
Source: CQ HealthBeat News
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