On Saturday November 7, 2009 the House of Representatives squeaked HR 3962 by with a 220-215 vote that approved this comprehensive health care reform bill. The primary revenue raiser on this bill is a 5.4% surtax on high income taxpayers.
It is currently unclear when the Senate will vote on their version of health care reform. President Obama has requested that the Senate pass its health care measure before the end of the year. Majority Leader Harry Reid, however, refused to guarantee that the Senate would complete its work by that point, saying that his chamber would not be “bound by any timelines.”
If the Senate passes its bill, the House and Senate bills would have to be reconciled into one document and voted on again.
The bill, as passed by the House, would apply a 5.4% surtax on married taxpayers filing jointly, with modified adjusted gross income (MAGI) above $1 million. The surtax will apply to all other taxpayers with MAGI over $500,000. These thresholds, as included in the current bill, are not currently adjusted for inflation. The legislature made a similar mistake when they first introduced the Alternative Minimum Tax (AMT), which has necessitated a last minute scramble to patch this error every year. Many political observers are suggesting that if future indexing is not included, this surtax will affect many more taxpayers than the law originally intends.
Singles taxpayers with household income above $500,000 will be the most dramatically effected under HR 3962, because the 5.4% surtax would apply at a much lower MAGI threshold than their counterparts, married taxpayers filing jointly. These taxpayers, with MAGI between $500,000 and $1 million would owe no surtax.
The bill also contains several other minor revenue-raising and disclosure provisions.
If you would like to discuss house HR 3962 could affect you, please call our offices and ask to speak to one of our shareholders or email us at info@taxwarriors.com.