AP Sources: Reid Eyes Payroll Tax Hike on Wealthy

[cal04]

http://www.nytimes.com/aponline/2009/11/11/us/politics/AP-US-Health-Care-Overhaul.html

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.

It was not known how large an increase Reid, D-Nev., was considering, or whether it would also apply to a company's portion of the tax. President Barack Obama has said he will not raise taxes on wage earners making less than $250,000.

The officials spoke only on condition of anonymity, saying they were not authorized to disclose details of private deliberations.

[CaliforniaPeggy]

1. As he should...

[laughingliberal]

2. A very good idea!

Probably will hear wailing and gnashing of teeth from Blue Dogs and Republicans. But it's a great idea.

[havocmom]

3. How 'bout restoring the levels of INCOME tax the top paid 30 years ago

PAYROLL taxes do not much matter to the top tier. Most of the really rich do not get 'paychecks', do they?

[NoUsername]

16. Exactly.

Income from capital gains should count as straight income, not "income that is special because most rich people 'earn' their money this way and thus it should be given a special rate of 15%."

Income is income, regardless of where it comes from. Start taxing it that way.

[MajorChode]

4. Here's the problem I have with it

It should be a tax on ALL income above $250K, not just payroll. The filthy rich get most of their income from equity investments and if the tax is only against payroll, it won't affect many of them at all.

[amborin]

7. yes, but starting w/ payroll is great!

right now, payroll taxes are regressive!

[MajorChode]

14. Not exactly

Payroll taxes are progressive, except for FICA. It's only when you start factoring in investment income do you get serious regression.

[cbdo2007]

17. Also should include bonuses and "perks"

If a CEO only makes $500,000 a year but makes $7,000,000 in bonus, plus car, plus vacation home, + + + + +

That should all be included.

There are way too many ways around a "payroll" tax which is part of the problem to begin with. Heck, even if they start a payroll tax AND start taxing bonuses at 90% that won't solve the problem. The rich folks have all the connections and will just get the money transferred to their Swiss bank accounts or some new scam.

[DJ13]

5. They need to tax investment earnings as income as well

No one invests for the long term at a 15% capital gains rate.

[amborin]

6. Great, overdue! folks pay payroll taxes on up to approx $96K a yr, & over that is scott free!

time to get fair!

presently, low and middle income wind up paying payroll taxes on a larger % of their pay

[OffWithTheirHeads]

8. The rich don't have payroll taxes, they have dividends

Reid must really think we are stupid.

[DJ13]

10. Makes for great headlines to show how "tough" he is on the wealthy

[madrchsod]

9. pay roll taxes?

since when did the rich care about payroll taxes? they have more creative ways to keep their "pay" from being taxed. go after stock options , deferred compensation, and what ever creative ways to not pay taxes.

what about taxes on each stock that is traded? the brits did this and it`s working for them...come harry think before ya speak.

[Canuckistanian]

11. Right. it should be income based

And that INCLUDES Capital Gains.

[MajorChode]

15. Because most people don't understand how the rich are taxed

Offering up a payroll tax doesn't really affect the filthy rich, but it makes it look as if you are really doing something.

[cascadiance]

12. The Donut idea isn't the best way to do this though...

Why should those earning $100k pay the same amount as those just under $250k?

I know he's doing this to keep his pledge of not raising taxes on those under $250k, but he could *lower* the tax rate AND remove the cap so that the only people paying more taxes would be those making over $250k, and those making less than $250k would get progressively a greater tax cut percentage-wise as you go towards $100k.

[Obamanaut]

13. At this point, what is the possibility that any increased tax revenues

will be siphoned off to pay for all the wars the weasels are sending the young (and some others) to the get maimed and killed?

I think they should hold off on all tax increases until the troops ALL come home. I don't trust Washington to use any increases in taxes for the designated purpose. I just don't trust them any more.