AP sources: Reid eyes payroll tax hike on wealthy

[Frank Booth]

Source: AP

WASHINGTON (AP) -- Majority Leader Harry Reid is considering a plan for higher payroll taxes on the upper-income earners to help finance health care legislation he intends to introduce in the Senate in the next several days, numerous Democratic officials said Wednesday.

These officials said one of the options Reid has had under review would raise the payroll tax that goes to Medicare, but only on income above $250,000 a year. Current law sets the tax at 1.45 percent of income, an amount matched by employers.

- - -

Reid's spokesman, Jim Manley, declined comment and said the majority leader has made no final decisions and is awaiting detailed information from the Congressional Budget Office about the cost and coverage implications of the proposals he has drafted.

Read more: http://finance.yahoo.com/news/AP-sources-Reid-eyes-payroll-apf-3528468655.html?x=0&sec=topStories&pos=main&asset=&ccode=

[AzNick]

1. Go for it buddy

But first work on the HRC

[bertman]

2. I have to ask. Does this mean that these "investors" who make millions are going to be

paying percentage-wise what we working stiffs pay.

A payroll tax seems very limited in scope.

I guess I just can't shake the feeling that anything that Harry Reid touches is not going to do much financial harm to the upper 2 percent.

[PSPS]

3. The "payroll tax" is FICA -- doesn't apply to investment income and capital gains

The billionaires still get a free ride on their dividend checks. If there were any fairness left, we'd go back to a graduated income tax with a top marginal rate of at least 70% like it was until Saint Reagan slashed it by 2/3.

(Marginal tax = the tax on the last dollar earned, NOT the tax on the entire amount. Example: If the top marginal rate is 70% on amounts over, say, $2 million, only that amount over $2 million is taxed at 70%. The $2 million itself is taxed at a lower rate. And who needs more than $2 million a year?)

[bertman]

5. That was my suspicion. Thanks for clarifying it, PSPS

[David Zephyr]

11. Thank goodness someone understands this and is articulating this extremely important point.

Forget about increasing payroll taxes on the super rich who are actually working and getting a paycheck and already paying income taxes and contributing to Social Security. Yeah, maybe they might pay more, but the real crime is that those who do NOT work one hour a day, but who live off of dividends, rents and royalties, mostly from money they inherited, these creeps are paying only capital gains and at the lowest tax rate of all Americans.

Raise the capital gains tax and soak those who are not productive, especially those who are under 65 with that sort of independent means. They are not working. They are not paying income tax. They are not contributing to the Social Security fund. And they are getting a free ride. Their capital should be taxed equally or even more than that of those who labor.

And while I'm at it, raise the inheritance tax after the first $1 Million to 75%. They can leave $1 Million and then they get 25% of anything they inherit after that.

[pnwmom]

14. Actually, except for certain non-taxable bonds, people pay the graduated income tax rates

for dividends, rents, and royalties -- not capital gains. In other words, whatever income you make in a salary is combined with these other sources of income to determine your overall income tax rate.

Capital gains tax, on the other hand, is due on the profit you make when you sell something, like a house or stock.

The FICA (Social Security) tax is a third type of tax, and it is computed based on your salary alone.

[hack89]

18. Dividends, rents and royalties are income and are taxed as income. nt

[dotymed]

20. At a very low rate....

it is based on the rich getting richer while working people
pay and pay...

[hack89]

23. It is taxed at the same rate as regular income

because it is income. You are thinking of capital gains.

To avoid any doubt, section 61 lists examples of sources of income that are taxable under the Code, including "Compensation for services, including fees, commissions, fringe benefits, and similar items"; "Gross income derived from business"; and "Gains derived from dealings in property". Other examples of income listed in section 61 include interest and dividends, rent, royalty payments, alimony payments; life insurance, pensions, and inheritances.

http://en.wikipedia.org/wiki/Internal_Revenue_Code_61

[lostnfound]

19. $1 M is too low -- 4 kids: $250K each; or small business, or half of it a small house in big city..

And you might think "$250K is plenty for anyone" but that can be a parent who dies young and leaves a $500K house and $500K in money to support his 4 young kids. Or leaves a wife, a disabled kid, and maybe another kid he wants to sent to college. Or an heir with medical costs that aren't being covered.

Whereas similar parents who have been lucky enough to live to see their kids into adulthood have been able to pay for their entire growing-up years plus college.

Kids who lose their parents young don't deserve the added loss of no financial security.

[boppers]

27. Really? $1 M is too low?

How are your arguments different if it's, oh, 10 million or 100 million? After all, if a kid only gets 25 million dollars, how will they survive?

"Kids who lose their parents young don't deserve the added loss of no financial security."

Uh, "financial security" is a luxury for the filthy rich. A luxury that 95% of the public doesn't have.

[salguine]

4. We have as much chance of the wealthy paying their share as we do of getting single-payer healthcare

[earcandle]

9. I saw them eat the bullet on cspan yesterday. They know they have to raise a tax. This is the

first idea out of the tunnel.... a good idea, actually.

That would fund what we need and give the economy what it
needs. 

[Joe Chi Minh]

17. Oh, no... They're not going to raise tax on the wealthy..... That's class war!

[earcandle]

24. I betcha 25 cents they do on people: 70% on profits over $2million.

[movonne]

6. This is what should be done .... money should be sifted down to

more people...all the money in the hand of a few is not good for our country...

[movonne]

7. This is what should be done .... money should be sifted down to

more people...all the money in the hand of a few is not good for our country...

[Double T]

8. What are you waiting for Harry; the filthy. stinking wealthy have ALL the GD $$$$$$$!

[avaistheone1]

10. It's about time the wealthy start to pay their fair share.

[The Hope Mobile]

12. Hell YES!!!!!!!!!!!! Its about damn time for this!!!!

Thank you Michael Moore for reintroducing it to the average American's thinking in Capitalism!

[onehandle]

13. He took my advice. Good. nt

[Vidar]

15. Good for a start.

[fasttense]

16. To reduce the huge budget deficit, all is needed is to repeal the Ronnie Raygun tax cuts.n/t

[PADemD]

21. INSTITUE A FINANCIAL TRANSACTION TAX, TOO!

"Where the Money Is"
http://www.nytimes.com/2009/01/13/opinion/13herbert.html

"Transaction tax figures start to add up for Gordon Brown"
http://www.guardian.co.uk/politics/2009/nov/08/transaction-tax-analysis

[FreeStateDemocrat]

22. Exempt the first $20,000 .

[earcandle]

25. Don't whine or bitch or complain. Just take quiet direct action.

[yurbud]

29. put a potato in the tailpipe of their limo?

[bemildred]

26. We need a "wealth tax" on the wealthy.

That ought to wake them up.

[yurbud]

28. how about a flat fee transaction tax high enough to take a bite out of Wall St. speculators?

[DavidDvorkin]

30. The punditocracy will scream bloody murder, but

the majority of Americans will be behind this.