WASHINGTON — House Democrats yesterday unveiled their plan to pay for a massive government overhaul of health care with a string of taxes on high-income earners and an astounding new 5.4 percent levy on people making more than $1 million.
The rich, medical providers and employers would foot most of the bill for the proposed reform of the system, which would move the United States toward universal health coverage.
New income surtaxes would begin with a 1 percent slap on individuals making $280,000 and soar to 5.4 percent on taxpayers making more than $1 million a year.
Bosses who don’t give their workers coverage would face a penalty totaling 8 percent of workers’ wages, with only small-business owners getting spared. And individuals who refuse to participate in health-insurance programs will also face penalties.
The left-tilting bill lacked an overall price tag, but some reports said the overall cost would be $1.5 trillion over a decade.
In addition to taxes, House Democrats envision cuts worth billions of dollars to the government’s existing health-care programs, Medicare and Medicaid — both of which already face financial collapse.
House Speaker Nancy Pelosi defended the new taxes on the rich as Democrats’ way of ensuring “that middle-income people in our country are not touched” by levies to finance health-care reform.
Rep. Charles Rangel, whose Ways and Means Committee will take up the legislation later this week, said the tax hike is the “best way” to pay for the plan after considering alternatives ranging from higher Medicare taxes to new levies on alcohol and soft drinks.
Rangel (D-NY) said pols settled on the surtax because “that’s where the votes are” in the House, where Democrats hold a firm majority.
With President Obama pushing for swift passage of a health-care bill before year’s end, House leaders want the bill to clear three committees and head to a full vote before Congress breaks in August.
But the overall plan — especially the tax increase and the punishment for companies — is much farther left than the Senate version of the bill being worked on, and it drew withering criticism from Republicans.
“During a deep economic recession, it is criminal malpractice for Democrats to push a government takeover of health care and a new small-business tax that will destroy more American jobs,” said House Republican leader John Boehner (R-Ohio). “After the Democrats’ trillion-dollar ‘stimulus’ did not fulfill the administration’s promises to create jobs immediately, a small business tax will make matters worse for middle-class Americans looking for real solutions to help put them back to work and give them better access to quality health care.
“Washington cannot afford to make the same mistake now that Democrats made earlier this year on the stimulus.”
Dick Durbin (Ill.), the No. 2 Democrat in the Senate, said the current House version is unlikely to survive the Senate, where many more Democrats have conservative constituencies that will not tolerate higher taxes or punishment of small businesses.
A 1 percent surtax would apply to incomes over $280,000 for individuals and $350,000 for couples, Rangel said last week.
Higher rates would apply when incomes reach $400,000 and $800,000 for individuals and $500,000 and $1 million for couples, he said.
The surtax would be levied on adjusted gross income, before deductions for items like mortgage interest and charitable gifts.
Capital gains also would be subject to the levy. Regular income taxes are assessed after such write-offs, and capital gains usually are taxed at lower rates. With Post Wire Services
churt@nypost.com