Families and Small Businesses to be Taxed to Pay for Health Reform

Gerrit Lansing /

To help pay for its expensive and painfully complex health care bill, Congress plans on burdening families and small businesses earning over $350,000 with a surtax. Ill-conceived “soak the rich” plans devised by Congress tend to inspire a yawn, a sigh, or applause from the vast majority of citizens who don’t have to actually pay the lopsided amount of taxes that the “rich” pay. Well, as it turns out, more and more of us might actually be “rich” enough to have to chip in to help fund government-run health insurance for the masses.

The surtax proposed by Rep. Charlie Rangel (D-NY) would stand independent of the income taxes Americans are already paying. Generally, a surtax is added onto an individual or business’s taxable income. However, in a maneuver to include more tax-filers into Congress’s double-tax treasure chest (or triple-tax if you invest in anything), Congress has decided to make the surtax applicable to your adjusted gross income, or AGI. Your AGI is what your income looks like before you take out deductions like state and local taxes, medical expenses, and mortgage interest payments. So it’s a higher number than your taxable income. (more…)