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Senate Mulls Medicare Tax on Capital Gains to Fund Health Plan

July 12, 2009

The Senate Finance Committee is discussing whether to apply Medicare taxes to capital gains and other non-wage income to help pay for an overhaul of the U.S. health-care system, two people familiar with the talks said.

The move would potentially raise hundreds of billions of dollars in revenue over the next decade by boosting taxes by 1.45 percentage points on income from dividends, interest, partnerships and rentals, the people said. Dividends and long- term capital gains are now taxed at 15 percent.

The proposal, modeled after a plan released this week by Citizens for Tax Justice, would force people living off investments to contribute taxes to the health-care system, said Steve Wamhoff, legislative director for the Washington research group. It was raised yesterday in a closed-door meeting of Finance Committee Democrats, according to people in the room.

The story continues …..

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