House Health Bill’s High-Income Surcharge is Sound and Well Targeted
Would Affect Fewer Than 2 Percent of Small Businesses
End Notes
[1] Congressional Budget Office, Letter to the Honorable John Dingell, November 20, 2009, http://www.cbo.gov/ftpdocs/107xx/doc10741/hr3962Revised.pdf. See also Congressional Budget Office, “Preliminary Analysis of the Affordable Health Care for America Act,” October 29, 2009, http://www.cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf.
[2] Tax Policy Center, “Distribution of Tax Units with Business Income, by Modified Adjusted Gross Income Level, 2019,” October 30, 2009, http://www.taxpolicycenter.org/numbers/Content/PDF/T09-0426.pdf .
[3] Edwin Park et al., “House Bill Expands Coverage, Lowers Health Cost Growth, and Reduces Deficits,” Center on Budget and Policy Priorities, Updated November 6, 2009, .
[4] Tax Policy Center, “America's Affordable Health Choices Act of 2009 Surcharge on High Income Individuals, Baseline: Current Law, Distribution of Federal Tax Change by Cash Income Percentile, 2019,” October 29, 2009, http://www.taxpolicycenter.org/numbers/Content/PDF/T09-0422.pdf.
[5] Congressional Budget Office, “Data on the Distribution of Federal Taxes and Household Income,” April 2009, http://www.cbo.gov/publications/collections/taxdistribution.cfm.
[6] This $617 billion figure would equal $656 billion in 2009 dollars.
[7] Between 2002 and 2006, the effective rate for the top 1 percent averaged 31.7 percent. In 1979 it was 37 percent, according to CBO data. For projected effective rates with the surcharge, see Tax Policy Center Table T09-0418, “America’s Affordable Health Choices Act of 2009 Surcharge on High Income Individuals,” October 29, 2009, http://www.taxpolicycenter.org/numbers/Content/PDF/T09-0418.pdf.
[8] Congressional Budget Office, “Effective Federal Tax Rates for All Households, by Comprehensive Household Income Quintile, 1979-2006,” April 2009, http://www.cbo.gov/publications/collections/tax/2009/effective_rates.pdf .
[9] See Tax Policy Center Table T09-0426, “Distribution of Tax Units with Business Income, by Modified Adjusted Gross Income Level, 2019,” October 30, 2009, http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=2501&DocTypeID=7 .
[10] IRS, “The 400 Individual Income Tax Returns Reporting the Highest Adjusted Gross Incomes Each Year, 1992-2006,” p. 4, http://www.irs.gov/pub/irs-soi/06intop400.pdf.
[11] A recent Joint Committee on Taxation analysis found that one-third of the revenues from the surcharge would come from business income paid under the individual income tax system. This figure is misleading, however, because it includes the income of the law and accounting firm partners and others filing schedules C, E, and F, who are not what many people think of as small business owners. Joint Committee on Taxation, “JCT Memorandum Providing Revenue Estimates for 5.4 Percent AGI Surtax on Business Income in H.R. 3962, Affordable Health Care for America Act,” November 3, 2009.
[12] Tax Policy Center Table T09-0426, “Distribution of Tax Units with Business Income, by Modified Adjusted Gross Income Level, 2019,” October 30, 2009, http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=2501&DocTypeID=7 .
[13] Jason Levitis and Chuck Marr, “History Contradicts Claim That President’s Budget Would Harm Small Business Job Creation,” Center on Budget and Policy Priorities, March 26, 2009, .