Rep. Charlie Rangel of New York and other House Democrats propose to pay for their $1.3 trillion bill to create government-run health care with a 5.4 percent surtax on 2.04 million high-income Americans — about half of them small business owners. Americans would face European-style taxes, paying top rates that – combined with local and state taxes – exceed those of economic competitors such as Germany and Japan. Taxpayers in Italy, Spain, and even France pay lower rates. And that’s not all: President Obama would have the power to increase the surtax.

Go here for the chart with all 50 states.

“The large tax increases proposed by House Ways and Means Chairman Charlie Rangel would harm over a million small businesses, making them less likely to expand and hire new workers,” Heritage senior policy analyst Rea S. Hederman Jr. writes. “Congress should not pass large tax increases on businesses that would hinder employment.”

Hederman, who compiled the chart as assistant director of Heritage’s Center for Data Analysis, adds:

The surtax, when combined with the expiration of President Bush’s tax cuts and various state and local taxes, lifts the marginal rates on small business to over 50 percent in most states. This is an increase of 10 percentage points in the marginal tax rate, and over a 28 percent increase in the top marginal tax rate. The top tax rate is higher than almost all other industrial nations.”