On November 7, 2009, the House passed H.R. 3962, the Affordable Health Care for America Act. The bill would expand Medicaid, grant subsidies to moderate-income households buying health insurance on newly established exchanges, and provide health insurance tax credits to some small businesses. These expenditures would be financed, in part, by a new 5.4 percent surtax on households with very high incomes, including married couples with incomes above $1 million.
The proposed millionaire surtax is politically attractive because its direct burden would fall on a very small group, roughly 0.3 percent of the population. Moreover, this group is extremely wealthy and could undoubtedly afford to pay additional taxes. For three reasons, however, the proposed surtax would be bad tax policy.
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This tiny tax is just the beginning. Like the federal income tax which was put on "only" the wealthy, the taxes for health care will soon be paid by regular Americans.