DEM HEALTH RX A POI$ON PILL IN NY
Congressional plans to fund a massive health-care
overhaul could have a job-killing effect on New York, creating a tax
rate of nearly 60 percent for the state's top earners and possibly
pressuring small-business owners to shed workers.
New York's top income bracket could reach as high
as 57 percent -- rates not seen in three decades -- to pay for the
massive health coverage proposed by House Democrats this week.
The top rate in New York City, home to many of the
state's wealthiest people, would be 58.68 percent, the
Washington-based Tax Foundation said in a report yesterday. .
That means New York's top earners, small-business
owners and most dynamic entrepreneurs will be facing new fees and
The non-partisan think-tank calculated the average
local tax rate in New York State at 1.7 percent, and combined it
with the 8.97 percent that high-bracket state taxpayers will shell
out in 2011, when the health care plan is set to take effect. Tack
on the 39.6 percent federal tax rate, 2.9 percent for Medicare and
5.4 percent for the health care "surtax," and the figure is 56.92
percent for the Empire State.
In New York City, the top tax rate is 3.65
percent, making the Big Apple's top combined rate even higher.
The $544 billion tax hike would violate one of
President Obama's ironclad campaign promises: No family will pay
higher tax rates than they would have paid in the 1990s.
Under the bill, three new tax brackets would be
created for high earners, with a top rate of 45 percent for families
making more than $1 million. That would be the highest income-tax
rate since 1986, when the top rate was 50 percent.
The legislation is especially onerous for business
owners, in part because it penalizes employers with a payroll bigger
than $400,000 some 8 percent of wages if they don't offer health
But the cost of the buy-in to the program may be
so prohibitive that it will dissuade owners from growing their
businesses -- a scary prospect in the midst of a recession.
Obama took to the airwaves yesterday with ads and
TV interviews promoting the need to reform health care.
As a Senate health committee passed a different
version of a health-care reform bill - a milestone for the issue -
Obama said on
NBC, "The American people have to realize that
there's no such thing as a free lunch."
And in a Rose Garden speech, he said the "status
quo" on health care is "threatening the financial stability of
families, of businesses, and of government. It's unsustainable, and
it has to change."
Asked if Obama supports the surtax on wealthiest
Americans even though it would break a campaign pledge,
White House spokesman
Robert Gibbs said only, "It's a process that
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