Liberal Group Offers Porposal to Fund Health Reform Plan

By Lori Montgomery

With lawmakers struggling to find ways to pay for an overhaul of the nation's health care system, the liberal Citizens for Tax Justice today offered its own modest proposal: A plan to raise $1 trillion over the next decade by targeting corporations, the wealthy and hedge-fund financiers.

The trade-off is only fair at a time when the government is propping up dozens of banks and other financial institutions, according to a CTJ report that lays out a variety of soak-the-rich tax options.

"After propping up major corporations and their CEOs and shareholders, Congress might find it reasonable to make the following deal: Main Street is paying to make Wall Street healthy. Wall Street, when it is healthy, will return the favor," the report says.

The report is in part a reaction to revenue proposals that CTJ, labor and other liberals find less appealing, particularly Senate Finance Committee chairman Max Baucus's (D-Mont.) plan to raise money by taxing employer-provided health benefits, a levy that could fall heavily on well-compensated union members. CTJ director Bob McIntyre said the report shows it would not be hard to raise plenty of cash through more "progressive" options. By some estimates, a health care overhaul could cost $1.5 trillion over the next decade.

Among CTJ's recommendations: Apply a portion of the 2.9 percent Medicare tax to investment and interest income, as well as wages. Tax capital gains and dividends as ordinary income, raising the rates from 15 percent to as much as 39.5 percent. Tax fees paid to hedge-fund managers as ordinary income. And close "corporate loopholes" worth as much as $30 billion over the next decade.

• Read the Report