November 12, 2009
Posted: November 12th, 2009 08:23 AM ET

From
Senate Majority Leader Harry Reid is considering a provision to raise payroll taxes for the wealthy as part of a health care bill, a Democratic source told CNN.
Senate Majority Leader Harry Reid is considering a provision to raise payroll taxes for the wealthy as part of a health care bill, a Democratic source told CNN.

Washington (CNN) - Senate Majority Leader Harry Reid is considering a provision to raise payroll taxes for the wealthy as part of a health care bill, a Democratic source told CNN.

The Democratic source said Reid is considering an increase in the Medicare tax for individuals with income exceeding $250,000. The current Medicare deduction is 1.4 percent of income.

The idea is an alternative to the Senate Finance Committee's proposal to tax so-called "Cadillac" health insurance plans that offer broad coverage at a much higher-than-average price.

Reid is using the Finance Committee bill and another from the Senate Health, Education, Labor and Pensions Committee to forge a Senate bill expected to come before the full chamber before Thanksgiving.

However, Democrats in the Senate have been under intense pressure from unions to drop the tax on Cadillac coverage. Organized labor is a key Democratic party constituency, and many rank-and-file union workers have high-cost plans they received by scaling back pay demands at the bargaining table.

It was unclear if the Medicare payroll tax hike being considered by Reid, D-Nevada, would replace the tax on Cadillac plans in the Senate bill. Reid is expected to introduce the Senate bill in coming days.

The House has passed its own health care bill, which includes a tax surcharge on individuals making more than $500,000 a year and couples earning more than $1 million a year.

Such a tax surcharge on the wealthy is opposed by most Senators, while the Cadillac health coverage is considered unacceptable to the Democratic majority in the House.

Reid's idea would be an attempt at compromise by tying the tax increase to more revenue for the popular Medicare program.

If the Senate passes a health care bill, the two chambers would have to merge their respective measures in a conference committee and approve the final version before it could go to President Barack Obama to be signed into law.

Filed under: Harry Reid • Health care


GI Joe   November 12th, 2009 10:55 am ET

Cut out all the loopholes the wealthy have – that will fund healthcare, medicare, and pay for Bush's wars in no time flat.

Robin   November 12th, 2009 10:51 am ET

Of course they are going to raise taxes people.

Cry Public Option all you want, but nothing is free.

Robert Smith   November 12th, 2009 10:50 am ET

I think this is a great idea. Those individuals with incomes of in excess of $250,000 have significantly more flexibility when it comes to managing their income.
The middle income have been absorbing the burden for far to long.

Michelle   November 12th, 2009 10:48 am ET

Someday people will realize that you don;t get something for nothing. Since Bush reduced the taxes for these folks, and the country is now in trouble, we need to slowly get back to a sustainable tax system...although a flat tax on everyone with NO deductions works for me. Think of all the money we'd take in, at a fair rate for everyone. I know, too easy, and all those IRS folks would be out of their jobs.

haren   November 12th, 2009 10:43 am ET

Stupid Independent voters of this country deserve bad economy of 8 years.

30 Year Veteran   November 12th, 2009 10:40 am ET

This is abomination what Reid wants. No Social Security is going to receive a cost of living raise but he wants to raise the tax. He is and idiot and deserves to belong in the non-christian party he is in. JUST LIKE PALIN SAYS THERE IS A ELDERLY DEATH CLAUSE IN OBAMA'S HEALTH BILL IT JUST COMES IN THE MANY EXTENTSIONS OF THE BILL. The elderly are struggling now. It would be simple for the government just to say once they reach 70 inject them and put them out of their misery. That is what the future is heading for. AMEN AND VOTE FOR ANOTHER DEMOCRAT.

Larry S   November 12th, 2009 10:38 am ET

This is just a little start of the additional taxes required to pay for the many spending bills of the current Congress. The debt will continue to increase. When is one of the Congressmen going to talk about a balanced budget. It will require someone from Congress to get this started.

SocialismBad   November 12th, 2009 10:37 am ET

Can we just cut to the chase and tax everybody making over $500,000 75% of their income? The Democrats want to turn the tax system into a confiscation system.

Tax the rich, feed the poor, Till there are no rich no more.
-- Ten Years After

Obama/Biden = One and Done, please God....   November 12th, 2009 10:34 am ET

Every time I learn more aboout Harry Reid I begin to believe his agenda is more about class warfare and punishing the wealthy and less about what he claims it is. Time for him to be voted into retirement.

Marshall   November 12th, 2009 10:33 am ET

Raising taxes, that is always the answer!

Carlos   November 12th, 2009 10:31 am ET

For all of you who voted for the lib dems, welcome to the party of taxes.

Obama=Trickle Up Poverty   November 12th, 2009 10:31 am ET

Unions will win out.........they control businesses and the politicians. Time to rid this country of the bullying Unions that are bankrupting businesses that Obama keeps bailing out.

marty   November 12th, 2009 10:29 am ET

How many taxes have to be placed on those who are generating the wealth of this nation? This is one more revelation of the goal of the Democrats to shift wealth from those making wealth to those consuming wealth. How far off is the day when the old joke becomes reality-two step income tax form, line one, how much did you make, line two, send it in. This is certainly the best recipe for creating a Third World country out of the best nation in the world!

Hmmm....   November 12th, 2009 10:28 am ET

If anyone does not think this behemoth of a not well thought out overhaul will not cost everyone something...well...are you in for a surprise. Even if you don;t pay into it directly, there is a cost and it will reveal itself in ways we cannopt yet imagine but more than likely in a poor economy. We all agree works needs to be done but clearly, with all going on, such as this, everyone also agrees we do not want what is being forced upon us. This is but another example.

Michael Carpenter   November 12th, 2009 10:28 am ET

I wonder if Liberals truly believe the continued taxation of the small business sector is going to encourage job growth? They preport to not be in favor of big business,while every decision they make will insure that only very large companies will survive this massive taxation.
Could it be this is in fact what they really want? They have proven that "for our own good" they will takeover business that is"too big to fail". If only large firms survive, it will be very easy to justify steping in at the first sign of a problem.
Consider, for example, all the stimulas money has gone to large companies, that by the way have proven their inabality to effiecently operate them. While everyone agrees that jobs come largely from the small business sector. Just asking.

Mark   November 12th, 2009 10:20 am ET

Reid is an IDIOT! Sorr for the crude word, but it fits him best.

dave   November 12th, 2009 10:20 am ET

Sure, why dont you just take away all of my paycheck and just give me welfare. Our children going to be so inspired to work hard and give all the money to the goverment.

Bubble of Sanity   November 12th, 2009 10:19 am ET

Rats! I though it was just "Reid Considering Hiking," and I thought he might be going to South America for a while. Too bad...

John - Concerned Indy   November 12th, 2009 10:18 am ET

Tax, tax, tax...anyone noticing a pattern here? Taxing the "rich" (who, by the way, aren't so rich anymore and would contribute a sliver of what it would take to fund this monstrosity) will take us about 1 yard into this football game and then guess where the burden falls: on the middle class. Punishing people for prosperity is wrong too in my opinion, the majority of us can be whatever we want to be and there shouldn't be a free ride.

Face it, there is no way to pay for this thing that will not RAISE the cost of health care, either directly or "indirectly" through higher taxes for you and me. We should be focusing on the things we can do NOW to LOWER the costs and provide care to a broader audience that both Dems and Repubs can agree on (pre-existing, ability to buy plans across state lines, malpractice insurance reform).

On a related note, how do you think all these taxes on the "rich" who are the creators of the small businesses that empoy 90% of the country will affect their abilitiy to hire more people/create jobs? Right, if I had less to work with and was forced to fund a health care program i can't afford, i wouldn't hire either. A viscious cycle that tax & spenders never learn.

Randolph Carter, I'm no expert but.....   November 12th, 2009 10:17 am ET

By one estimate, the real income of the richest 5% of Americans went up 140% in the last 10 years. The other 95%? Their income went up 0%. Trickle down indeed. Sorry guys, the party's over. Time to start paying your fair share. Not that you ever have or will, given all of the available loopholes and offshore tax dodges. Have a nice day!

Dean   November 12th, 2009 10:16 am ET

And raise the salary ceiling on social security taxes while you are at it.

J.C. - Independent 4 Public Option   November 12th, 2009 10:13 am ET

It is not a real solution to hike tax rates without trying to lower health care costs. Medicare should continuously trim wastes and control cost growth.

It is also necessary to control malpractice insurance. The US is infamous worldwide for astronomical awards for personal injuries and damage. Everyone pays for the award. This waste is the same for employer-based health insurance. When unchecked premiums go up, employers have to increase the price of goods of the company and consumers have to pay for it. Employers think employees are paying for it, while employees think employers are paying. The winner is the insurance-medical industrial complex and health care costs continue to rise.

We cannot scream for anti-abortion and then don't provide health care for these otherwise aborted babies and their parents. Why bring these babies to a suffering world? If you love them, help care for them.

Bob in Pa   November 12th, 2009 10:11 am ET

Idiot ! – Sorry, but this is the politest word I have for this man.

Fred in Illinois   November 12th, 2009 10:10 am ET

What? A Democrat wanting to RAISE taxes at a time when 10% of Americans are unemployed?

Sigh... I really wish we had term limits anymore...

Phil   November 12th, 2009 10:10 am ET

Real nice. Seriously, why is it the Democrats think anyone they deem to be wealthy owe it to the rest of the nation by paying a lot more taxes. I still am shocked the American people let this fly. I guess Americans have become a handout nation. I am far from making $250k a year, but am strongly agains the notion those who do should be footing the bill for those who don't make as much or don't want to work. It's time Americans wake up. Never in a million years would our fore fathers approve of this socialistic methodology instituted by the Democrats. Shame on Congress and anyone who agrees to this.

mime   November 12th, 2009 10:08 am ET

finally some good news to save medicare should have done this years ago same for social security i would rather pay the taxes than lose the best idea usa had to keep the seniors money safe and sound

Tania   November 12th, 2009 10:07 am ET

Even with a tax, your medical coverage will be better that what you will selective get (after paying through the nose) from the insurance companies - who will then tell you your life is a pre-existing condition for no coverage! The Canadians got it right. They're taken care of without losing their homes and going bankrupt.

Party Purity will never bring Political Power!   November 12th, 2009 10:07 am ET

This is a better idea than taxing the insurance plans. If folks want to pay more so be it, but if we tax those plans, that is an incentive to drop them.

I think the income level should also be lowered, since at some point all of us will be using Medicare.

Fred   November 12th, 2009 10:07 am ET

And here it comes. Right now their raising the payroll taxes on those making $250,000 or more per year. When the budget doesn't work out for that, expect the payroll tax hike for those of lower incomes to be affected.

LR   November 12th, 2009 10:01 am ET

no surprise there, tax, tax, tax, spend, spend, spend, tax some more.

People, who somehow read into the current proposals that the medical care cost will get under control, are delusional. Dems are just planning to spend and tax, like their usual modus operandi :-/

Jeff   November 12th, 2009 10:01 am ET

If Medicare can cut half a trillion dollars of waste to be put to other uses, why does the funding for it need to be increased? Maybe the recovered waste should be kept in the Medicare system and used on its beneficiaries.

Carlton Desmoney   November 12th, 2009 9:59 am ET

How many more jails will the TARP fund for, as more and more Americans can't pay their tax bill and their insurance-to-come mandated additional costs?

munchmom   November 12th, 2009 9:57 am ET

I thought that Obama claimed it could all be done with no tax increases? What a crock and a joke the whole bunch is! Hurry up 2010 and 2012!

Mark   November 12th, 2009 9:52 am ET

These idiot liberals and their out of control spending is going to put all tax payers in serious trouble.

J.C. - Independent 4 Public Option   November 12th, 2009 9:52 am ET

Well, we have to raise either tax rate or age as we live much longer now.
But how much would be fair to pay doctors for one visit?
In Canada, it costs CAN $60 per visit for Americans.

Pragmatic   November 12th, 2009 9:44 am ET

Debate, discussion, negotiations: that's Democracy – not always neat and pretty – but so much better than 176 republicans voting "no" – just as they were ordered to do.

Wayne   November 12th, 2009 9:40 am ET

How about putting a tax on campaign donations and PAC/Lobbyist donations? That should generate enough money to pay for every social program that the Gov't wants to do for the next 25 years.

Scott, Tucson   November 12th, 2009 9:34 am ET

Just your typical democratic tax and spend politician, we need to rid Congress of these crooks. How about cutting foreign aid and put that money towards the coverage of any health care costs? About fining both illegals, their employers and the country of origin and use that towards covering the illegal's medical care too.

jay   November 12th, 2009 9:33 am ET

It shows the fact that this is not a viable plan as the democrats have to scamble to pay for something that is not going to add to the debt. If it was so cut and dried as to not raise the debt, why all the "monetary magic" that the Dems seem to have to use to get this thing through.

Annie, Atlanta   November 12th, 2009 9:28 am ET

I don't understand why he doesn't raise it for all of us, and give us Medicare for all. It's already in place. I've seen it work for both my parents. Along with a supplemental plan, it's quite effective. I don't understand why this has to be so complicated. And I don't understand why this has become so political.

It's not about politics, per se. It's about the insurance industry having total control over us, making obscene profits, providing substandard coverage, and deciding who is going to live and die. They have way too much control. We can't even cancel our policies for a couple of months in protest for fear of not getting covered again. Why are we sitting back and allowing 1 industry to control us like this?

JAC   November 12th, 2009 9:24 am ET

Nothing but abject class warfare.

Hello–I work to make a better life for me and mine. I pay my taxes for the defense of this still great country and to help the truly needy. I pay for healthcare provided through my employer.

I don't live in Nevada, but every time I get a request from the Nevada Republican party for money to defeat Harry, I loosen the purse strings.

Harry, I live in New Jersey. What we did to our governor here is what the good people of Nevada will do to you soon.

Government help for Me Only   November 12th, 2009 9:22 am ET

I want my social security check, ssi check, medicare, medicad, unemployment check, cash for clunchers check, home buyer tax credit, and the government to find me a job and educate my kids---- Just fill in the blanks. I want the government to stay out of my life when it comes to HCR because it costs too much money.

tjaman   November 12th, 2009 9:22 am ET

Really. Now on top of a national misinformation campaign (hi Janie! Obama's tax care is gonna eat your granny! flee! flee for the hills!) we're quoting anonymous sources in news items on issues of this magnitude? Come back when you've got someone on the record.

strong   November 12th, 2009 9:21 am ET

We are sooo screwed, people.

Deborah Black   November 12th, 2009 9:20 am ET

This is a good idea and will directly help Medicare. Need to make sure there is a lock box on Medicare and these funds can not be touched except for use in paying for Medicare.

Lisa   November 12th, 2009 9:19 am ET

Why do you need medicare when the plan covers everyone? Just another scare tactic the republicans use to scare the seniors. Anyone can talk to seniors into anything, just like Sarah Palin.

Pat Boone/Chuck Norris in 2012   November 12th, 2009 9:17 am ET

Increasing the tax on those of us making more than $250,000 is unAmerican.

We need to make sure that only Fox supported candidates win in 2010. We need more senators like Coburn, who can hold up the vote on veteran's assistance, or representative like Hoekstra who release national security intelligence to the press, or DeMint who supports leaders of a military coup in Honduras which goes against our national laws. "C" Streeters like Ensign and Vitters that deserve consideration.

Lisa   November 12th, 2009 9:16 am ET

Why is it ok to pay for a war but not for healthcare? I wouldn't mind paying a little extra in taxes if it ensure healthcare for everyone. $10 extra in taxes a month sure does beat the $395 a month I pay in health insurance. I just found out that my insurance premium is going up next year. This has to stop please Senator Reid Help Us!!!! You can take an extra $100 out of my check because I'm not selffish like the party of "NO" republicans!!!

Eric   November 12th, 2009 9:11 am ET

Tap the wealthy!! Tap the wealthy!! Can the democrats come up with any constructive way of paying for their objectives?

Mike in LR   November 12th, 2009 9:11 am ET

Democrat party – owned by the unions. I thought BO was going to change all that. Like he was going to "crack down" on lobbyist's influence on Congress and the Whitehouse. Just more campaign lies. Typical politician, nothing new here move along.

Dominican mama 4 Obama   November 12th, 2009 9:11 am ET

Such a tax surcharge on the wealthy is opposed by most Senators,
----------------------------–
Well, those Senators sure know how to protect their own, don't they? And guess what folks: it's not us. The 'little people', the $250k and under crowd, have been the primary targets of most tax increases in the past decade. We've been taking it up the wazoo because it is not profitable for those we elected to Washington to speak for us. But let their echelon be threatened and everybody finds their voice to stop it.

Jeff from Chicago   November 12th, 2009 9:10 am ET

The solution for the democrats is always to tax the rich.
Soon the rich will take their money and invest elsewhere, (it's already started), just like business has done with their jobs.

Way to go dimocrats. Before long who will you tax since the rich and the business will be gone?

The way to attract jobs, business and investment is to make it attractive to those who generate jobs, business and investment. It's those people and businesses you are driving away with your taxes and out of control spending.

The old saying is true, you can attrack more bees with honey that with vinegar but when did democrats ever care about attracting business and investment. They care about giving people something for nothing so they will vote for them

Independant Vet   November 12th, 2009 9:07 am ET

Reid should take a long look in a mirror. And say I am going to give everyone the same coverage as we get . And for the same price .

Pat F   November 12th, 2009 9:06 am ET

Go ahead Harry. That will just make the GOP's return to power in both houses in 2010 more assured.

Rachel   November 12th, 2009 9:06 am ET

Can the senate please define what they consider a cadilliac plan. I am curious. I live in one of the 10 cash strapped states (WI) I can afford taxes on my healthcare plan.

Charlie in Maine   November 12th, 2009 9:05 am ET

They have had a free ride for too long time to pay up. There is a reason the Democrats won the election and if they don't stand up and use their majority they will have it for a very short time.

David   November 12th, 2009 9:04 am ET

So now some one earning $250,000 a year is considered wealthy? This figure keeps dropping so much, pretty soon everyone will be considered wealthy. Just another example of taxes going in the wrong direction. Let's face it, this administration is out of control and there seems to be no end in sight. Yes health care needs to be fixed, but not overhauled. If they know how to save billions based on some corrections, just make those corrections. Fix what is broken, but do not touch what is working for most of the country.

hongli   November 12th, 2009 9:04 am ET

Why is Reid even considering to do so?? People who are making over 250,000.00 MUST be TAXED . It's TIME the WEALTHY take some RESPONSIBILITIES. They got away with MURDER during the Bush/Cheney years of Communism.

German,Irish American   November 12th, 2009 9:02 am ET

That's is an excellant idea, raise the taxes on the people that already pay 95% of the federal tax, and employ the nations workers. That will make them want to run out and start hiring. Three more years of this nightmare administration, the US may not survive this lunacy.

Dutch/Bad Newz, VA   November 12th, 2009 9:02 am ET

Go for it Harry. The wealthy must have seen this coming. How long did they think those Bush tax cuts were going to stay in place???

Kevin in Ohio   November 12th, 2009 9:01 am ET

And this is a surprise? Geez, the notion of tax hikes is all the liberals think about. Pretty soon, that source is going to dry up, because the economy will be in shatters.

Enough   November 12th, 2009 9:00 am ET

Everyone crying the rich need to pay their fair share.............exactly what % of their income do YOU want? 47% of Americans pay NO income tax, the other 53% are paying it all and the rich with their so called tax breaks are carrying the majority of the burden. How about a flat tax, with NO deductions, everyone pays the same % off the top..............now that would be fair, so it'll never happen. Those who pay NOTHING need to step up to the plate and pay their fair share.

USN   November 12th, 2009 8:59 am ET

Taxes ....taxes ...more taxes ,,a tax on taxes . and If that doesn't fix the economy we will raise more taxes ! It's Bushes fault anyway .

Otis   November 12th, 2009 8:59 am ET

This is ridiculous.

Each citizen pays into Medicare so they can have Medicare when they turn 65.

This health care plan is going to re-route the health care which we are PRE-BUYING right now and give it to those who do not have any.

Now, on top of all that, taxes on Medicare – your health care plan for when you turn 65 – for the wealthy will be raised higher?

My doctor said it best yesterday: stop over-complicating this and just allow a true free market of insurance purchasing exist. People will know how to shop for a plan that they need.

By the way, you will be ordered to, by the US government, to insure yourself or be fined. How unconstitutional is this?

Willy Brown   November 12th, 2009 8:59 am ET

Democrats want to raise taxes. No surprise here. How's that hope and change working for you now?

Victim of Democratic Greed   November 12th, 2009 8:57 am ET

Now there's a surprise.........a Democrat raising taxes on working people to pay for other peoples health care. Governments only role in health care should be making sure it is affordable and available for everyone to purchase. Not understanding why we should bother going to work anymore. What has happened to self responsibility? If we choose to work and have double income with no kids, why should we pay for everyone else who chooses to have a ton of kids on one income? This used to be a free country where you were able to work hard and get ahead............no more.

Johnny DC   November 12th, 2009 8:54 am ET

Nonpartisan estimates have already laughed off the possibility that these tax hikes on such a small sliver of the population will not come close to making the public health care affordable to our budget.

All these discussions accomplish is to alienate various sectors of the Senate and ensure the safe non-passage of this bill.

Nice work, Democrats.

Jane   November 12th, 2009 8:51 am ET

Hi Ho, Hi Ho, It's off to tax the citizen's I go!!!! Watch out for Harry he's just starting. Next it will be the middle class.....fortunately his rein in congress is about to end.

Mel Bailey   November 12th, 2009 8:46 am ET

Everybody seems to want something personal for their support. So our politicians are being held at a less than ideal level. We need to release them to ask the bigger question: What is best for the nation, and what are the just and equitable ways to achieve it?

Shame on us when we become the evil we hate.

Herehegoes   November 12th, 2009 8:45 am ET

Well it won't be long before they drop it to anyone who has a job will get taxed for the great giveaway program.Same old, same old.

George   November 12th, 2009 8:43 am ET

Good idea!!!! Hey they had an 8 year tax cut compliments of George Bush. Get some jobs back to America and this won't be necessary.
Our tax base is everywhere but here. Slave labor, and child labor are replacing our workers who used to pay taxes.

The WEALTHY made this happen, so tax them to the limit then more yet.

southerncousin   November 12th, 2009 8:40 am ET

Once the truth about this giveaway program is exposed, how long do you think it will be before middle class Americans are taxed. Right now the libs are playing their old class warfare game. Hard working, responsible, educated, non drug addict Americans will end up paying more of the bills for the dope smoking, non working, non taxpaying Oprah watchers that were paid to vote for Obama and the libs. That is the liberal philosophy.

ran   November 12th, 2009 8:40 am ET

Just more games. Now even the Democrats are being obstructionist on this. Reid will never get 60 votes so he might as well end it now and start over or go the 51 vote option and give us universal single payer now.

Something needs to be done either a vote or start over.

Fed Up   November 12th, 2009 8:39 am ET

Hmmm. I thought there weren't going to be any tax increases to pay for this medical plan. Guess that is another untruth that was told. Big surprise there!!

Mike Syracuse, NY   November 12th, 2009 8:38 am ET

Hey, here's a radical idea; if we can't pay for it without raising taxes, don't do it! Democrats are spending the country into third world status.

chill   November 12th, 2009 8:34 am ET

This Cadilac plan opposition by the unions seems starnge to me. Aren't most union contracts no more than a few years in length? Won't most of them be renegotiated before most provisions of the health care bill kick in? Can't the unions reverse course and go for higher wages in lieu of these expensive plans that I'm guessing don't help most of them all that much anyway? Personally, I'd like to see a mix of the surtax and the cadillac tax.

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