Three weeks ago, House Speaker Nancy Pelosi put forth her health care reform proposal that was eventually passed (with one amendment pertaining to abortion) by the House. Speaker Pelosi’s big financing for the additional spending in the bill came from a proposed 5.4 percent surtaxA surtax is an additional tax levied on top of an already existing business or individual tax and can have a flat or progressive rate structure. Surtaxes are typically enacted to fund a specific program or initiative, whereas revenue from broader-based taxes, like the individual income tax, typically cover a multitude of programs and services. on taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. returns over $1 million ($500,000 for singles).
Now Senate Majority Leader Harry Reid is eyeing his health care reform proposal, and the AP is reporting that Reid is looking at raising Medicare taxes on those earning more than $250,000.
Currently, earnings are taxed at a flat rate of 1.45% on employer and 1.45% on employee (2.9% total) for Medicare, and unlike Social Security taxes, there is no ceiling.Share