Senator Reid Seeking to Raise Medicare Tax on Those Earning Above $250,000

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 surtax on tax 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.