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House Dems propose tax on wealthy to fund health care

  • Story Highlights
  • New tax would apply to individuals who make more than $280,000 a year
  • Source: Tax would also apply to married couples who make more than $350,000
  • Revenue expected to offset roughly $1 trillion that health care bill likely to cost
  • Committee Dems jettisoned other ideas, including taxing sugary drinks
From Deirdre Walsh
CNN Congressional Producer
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WASHINGTON (CNN) -- Democrats on the House Ways and Means Committee on Friday proposed a graduated tax on wealthy Americans to pay for health care reform, several Democratic sources told CNN.

The new tax would apply to individuals who make more than $280,000 a year and married couples who make more than $350,000, the sources said.

Individuals making up to $400,000 and couples making up to $500,000 would be assessed a 1 percent tax on their adjusted gross income, they said. A higher rate would apply to individuals making up to $800,000 and for couples making up to $1 million per year, and an even higher rate would apply to individuals and couples with higher incomes.

The rates for the tax on the two higher brackets are still being finalized, the sources said.

Committee Democrats jettisoned other ideas to pay for the reform, including new taxes on sugary drinks or an increase in Medicare payroll taxes.

Sources say the new tax is expected to bring in $540 billion over 10 years. The new revenue, combined with approximately $500 billion in projected savings from health care reforms, would offset the roughly $1 trillion that the House Democrats' bill is expected to cost, they said.

The Congressional Budget Office has not yet released its cost estimate on the House bill.

House Democratic leaders are planning to introduce their legislation Monday. The committees focused on health care in the House are expected to bring consideration on the bill later next week.

All About Health Care PolicyU.S. House Committee on Ways and Means

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