WASHINGTON (CNN) - Democrats on the House Ways and Means Committee Friday proposed a graduated tax on wealthy Americans to pay for health care reform, to several Democratic sources tell CNN.
The new tax would kick in for individuals who make over between $280,000 to $400,000 per year and for married couples who make from $350,000 to 500,000 per year, imposing a 1 percent tax on their adjusted gross income.
The tax rate would increase to a higher percentage for individuals making between $400,000 to 800,000 and for couples making $500,000 to $1 million per year.
Individuals making $800,000 or above and couples making $1 million or more per year would be taxed at an even higher rate.
The rates for the tax on the two higher brackets are still being finalized, according to the sources. Committee Democrats jettisoned other ideas to pay for the bill, including new taxes on sugary drinks or an increase in Medicare payroll taxes.
Sources say the new tax is expected to bring in $540 billion over ten years. This new revenue, combined with approximately $500 billion in projected savings from health care reforms, would offset the roughly $1 trillion that the House Democrats' health care bill is expected to cost, they said. The Congressional Budget Office has not released its cost estimate yet on the House bill.
House Democratic leaders are planning to introduce their legislation on Monday. The committees focused on health care in the House are expected to being consideration on the bill later next week.