Still shifting healthcare surtax sands

July 23, 2009

"Watching Barack Obama trying to push members of Congress
toward some kind of agreement on a health care bill
gives you a new appreciation for why Hillary Clinton decided
to just write the whole thing herself and dump it on them."

— Gail Collins, The Health Care Sausage

During a primetime national television press conference last night, the President again made his case for quick action on health care reform.

Today, the House Energy and Commerce Committee, one of five Capitol Hill panels stirring this legislative pot, canceled (yet again) its healthcare markup
session
, making it unlikely that the House will complete its work before it takes its August recess.

On the other side of the Hill, Senate Majority Whip Dick Durbin (D-Ill.) declared the pre-recess deadline unworkable. UPDATE, 1 p.m. CDT:  Senate Majority Leader Harry Reid (D-Nev.) just confirmed that healthcare legislation will not be considered until September.

The major problem is how to pay for an overhaul that would provide medical coverage for the almost 46 million uninsured Americans.

Surtax tweaks: Last night, Obama hinted at some give on the current healthcare payment option of choice, a surtax on the wealthy. The prez indicated that he wouldn't necessarily be averse to raising the tax threshold to $1 million.

Legislation already making it through the Congressional maze calls for that. Starting in 2011, a 5.4 percent income surtax would be imposed on couples making
more than $1 million a year.

But others would face smaller surtax charges, too. Couples making more than
$350,000 would have to pay a surtax of 1 percent tax and those making
more than $500,000 would face a 1.5 percent surtax.

There's already been push back on the under-$1-million surtax and House leaders have indicated they will adjust the legislation accordingly.

Some lawmakers, however, still have concerns. Aside from the hardcore no-new-taxes contingent, some fear that a surtax approach could hurt small businesses. This is the reason given by the conservative Blue Dog Democrats who oppose the bill.

Old_Blue_DC_blue_dog
Blue Dog painting by George Rodrigue
Unofficial mascot of the Blue Dog Democrats

The Joint Committee on Taxation numbers crunchers say that only the
wealthiest 1.2 percent of taxpayers would pay the surcharge. And Citizens for Tax Justice (CTJ) says small businesses won't be hit as hard as surtax opponents say.

The Washington-D.C.-based nonprofit says that its research shows only 4 to 5 percent of taxpayers who get more than
half their income from small businesses they own or operate would pay the surcharge in 2011.

CTJ's full report also includes state-by-state state-by-state estimates of the effect of the surtax.

Healthcare committee collaboration: OK, collaboration is probably not the best word to use in connection with Capitol Hill, but eventually the separate work of two Senate committees and three on the House side will have to be synthesized into one bill.

That's part of the reason that the pre-August-recess deadline always was viewed a bit skeptically.

So what committees are working on the healthcare overhaul?

The Senate's Health, Employment, Labor and Pensions (HELP) Committee
was the first panel to approve a healthcare
reform package. (I swear, these guys come up with acronyms and then make the official titles work with the initials.)

The Senate Finance Committee is still working on its proposal, but things aren't going so well right now.

On the House side, three committees have jurisdiction.

The tax-writing Ways and Means panel approved its plan last Friday. The aforementioned Energy and Commerce Committee, along with the Education and Labor Committee are still plugging away.

Some folks are calling for Congress to forgo its annual end-of-summer break and keep working on healthcare reform. Don't count on it.

Expect to see your Representative and Senators back home next month. When you do, ask them about healthcare reform and let them know what you think about the proposals.

Related posts:

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
Tropical Storm Arthur’s deadly arrival underscores need for disaster preparation

June 18, 2026

Tropical Storm Arthur as it moved toward the Texas cost on June 17. Its deadly…

Read More
Tax Season 2026 Continues!

We made it. Tax Day 2025 is finally over. For most of us. When the filing season started on Jan. 26, millions who were expecting refunds filed immediately. Most of us got our returns to the Internal Revenue Service by April 15. But plenty of taxpayers also got extensions. They are looking at an Oct. 15 filing deadline.

Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • “…gives you a new appreciation for why Hillary Clinton decided to just write the whole thing herself and dump it on them.”
    Except that whole separation of powers sort of stuff! Although maybe she thinks its better for the president just to make up the laws (i.e. draft them) then just put them into affect also.

Comments are closed.