Democrats to punish successful to pay for health care plan

Bloomberg:

House Democrats plan to fund the broadest U.S. health-care expansion in four decades by increasing taxes on the wealthiest Americans, imposing a surtax of 5.4 percent on couples with more than $1 million in income.

The legislation unveiled yesterday would place additional taxes on households with more than $350,000 a year in income and calls for further increases if the measure doesn’t hit a target for cost savings. The provisions are intended to raise $544 billion over 10 years.

House leaders said the plan, which includes mandates to purchase coverage and a public health-insurance option, would cover 97 percent of Americans by 2019. President Barack Obama praised their work, saying it will “begin the process of fixing what’s broken” in the system.

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The plan drew fire from the U.S. Chamber of Commerce, the nation’s biggest business lobby.

“The intention of this plan is to tax high-income households, but the real victims would be America’s small business owners,” the Washington-based group’s president, Thomas Donohue, said in a statement. “Since when does our great free-market country punish success?”

The legislation would raise taxes on larger corporations as well. Among other things, it would make it easier for the Internal Revenue Service to prosecute tax shelters, and deny certain cross-border deductions that some companies are able to claim through tax treaties.

The House is also proposing a mandate on Americans above a certain income level: People would be penalized as much as 2.5 percent of their income for failure to buy health insurance. Most employers would be required to insure their employees or pay a penalty equal to as much as 8 percent of their payroll.

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Want that mandate for those not buying insurance constitute a tax increase on people making less that $250,000? Of course it will.

One thing you should count on if this legislation passes is that it will cost more than the Democrats say and they will have to raise taxes more than they say they will. It will also mean rationed health care.