FRONT PAGE CONTRIBUTOR
Health Care Bill Fact of the Day: Creating the Highest Federal Tax Rates in 20 Years
The “Affordable Health Choices Act of 2009″ imposes a “surtax,” or income tax increase, on all Americans making $280,000 a year or more.
Under the bill, those making $280,000 ($350,000 for couples) will have their taxes increased by 1 percentage point, those making $400,000 ($500,000 for couples) by 1.5 percentage points, and those making more than $800,000 ($1 million for couples) by 5.4 percentage points.
This would make the top marginal federal tax rate 40.4% – the highest it has been since the Clinton years. If President Obama keeps his promise to let the Bush tax cuts expire (which he reiterated at a Portsmouth, NH town hall on Tuesday) that top marginal rate will increase to 45% – the highest it has been since the Reagan tax cuts of 1986.
If a review in 2013 by the Congressional Budget Office determines the health care overhaul has failed to save at least $175 billion, the bill provides for an automatic doubling of the tax increases on the lower two of those three incomes.
Further, with state income taxes rising across the country, this surtax and automatic 2013 increase would put the top combined federal-state income tax rates in over half of all states at 50% or more.
Source: HR 3200 §59C