As the battle over health care reform in Congress continues, the likelihood that a tax hike will be used to pay for part of the package is growing stronger. Under a plan unveiled by the House Ways & Means Chairman—Rep. Charles Rangel (D-N.Y.)—single filers with an AGI of between $280,000 and $400,000, and joint filers with an AGI of between $350,000 and $500,000 would be hit with a 1% surtax.
The surtax, which would not kick in until 2011, would increase for those with higher incomes (up to 5.4% for an AGI of $1 million or more). Note: A top tax rate of 39.6% is already in store for 2011 if the current rate of 35% is allowed to expire.