Some Ideas On Financing Health Care Reform

This is from Politico.com. It’s a list of the various ways that might be used to pay for health care. I don’t think it requires any editorial comment but I can’t avoid at least one.

If you think that this these taxes represent the end and not the beginning of what it’s going to take to pay for this then I have several bridges in a portfolio that I am sure I can interest you in.

Instead of relying on one major source of funding, the committee will have to piece together revenue from a variety of places. The list, as detailed to POLITICO by people familiar with the negotiations, shows senators could fill the $320 billion gap quickly if they were able to find consensus to:

— Broaden the 1.45-percent Medicare tax on earned income to “passive income,” which could include money from capital gains, rental properties and businesses that do not require direct participation. This could raise $100 billion.

— Levy a five-percent surtax on individuals who earn more than $500,000 and couples that make $1 million.

—Tax health benefitsat a higher level than had been considered. Two scenarios are in play. Taxing plans worth more than $20,300 for a family and $8,300 for an individual could raise $240 billion. Increasing the cut-off to plans worth more than $25,000 would bring $90 billion.

— Capping the tax break on itemized deductions at 28 percent, as President Barack Obama had proposed, or freezing the top deduction rate at 35 percent when the Bush tax cuts expire in 2010. The first scenario would raise $168 billion, while the second would collect $90 billion.

— Issue tax credit bonds to pay for the proposed Medicaid expansion, raising $75 billion.

— Charge fees topharmaceuticalmanufacturers, bringing in as much as $20 billion, and insuranceproviders, raising $75 billion.

- Raise taxes on sodas and sugary drinks. A 3-cent hike could pick up $30 billion, and a 10-cent hike could make $100 billion. This one already appears out of favor: Many senators have specifically ruled out the sugar tax, and a Senate Democratic source said it was the one option that was clearly not gaining traction with committee members.

Other options are also under consideration, sources said.

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