Health Reform May be Accompanied by Upper-Income Tax Increases

Posted in Health Care , Health Insurance

March 3rd, 2009

President Obama has proposed a $634 billion plan to provide health care coverage to all Americans; however, as a result, individuals in the upper-income tax bracket may have to bear some of the brunt in tax hikes. The proposal also looks to cut government health spending, and if successful, should pay for health care reform over the next 10 years.

Tax Increases

As a part of the proposed plan, Obama wants to end tax breaks for the wealthiest 2% of Americans in the form of increases. These increases will come from reducing deductions on mortgage interest and charitable contributions.

Spending Cuts

The spending cuts are aimed at decreasing overall health care spending, while at the same time raising money to create near-universal health care. These cuts are predicted to have the biggest effect on hospitals, prescription drug manufacturers and managed-care companies.

Other Budget Plans

A few additional plans for Obamas budget include programs that will help schools meet higher standards and encourage improved teacher performance. Also, he wants to improve energy technologies and is doing so by dedicating $15 billion of his budget per year to energy sources such as wind, solar energy and clean coal. He hopes that distributing and investing his budget appropriately over the next 10 years will also turn around the $1.3 trillion deficit his administration inherited.

The health care portion of the plan is set to save the average family $2,500 a year in health-care costs. While Republicans in Congress are sternly against such a large budget bill only months after approving the TARP financial bailout, Democrats appear to want to move forward.