New House Health Care Proposal Introduces New Taxes

The 1990 page House health care bill imposes a 5.4% tax on individuals with incomes over $500,000 and $1 million for married couples. The provision is expected to raise $460 billion. The bill also adds a new 2.5% tax on the sale of some medical devices, which is estimated to raise $20 billion. A new $2,500 limit on employee contributions to health savings accounts is expected to raise approximately $13 billion.

These provisions are not yet law, but represent the House's latest version of health care reform. The final legislation will have to be agreed to by the Senate and signed by President Obama.

Democrats and Republicans Introduce Legislation to Prevent Estate Tax Increase

Four members of the House Ways and Means Committee introduced legislation designed to stop estate tax rates from rising at the end of 2010. Sponsored by Rep. Shelley Berkley, D-Nev., the Estate Tax Relief Bill of 2009 (HR 3905) was cosponsored by Reps. Kevin Brady, R-Tex., Artur Davis, D-Ala., and Devin Nunes, R-Calif. It would increase the current exemption from $3.5 million to $5 million by 2019. It would also reduce the estate tax rate from 45 percent to 35 percent over the same period.

Currently, the estate tax would be eliminated for in 2010, but return as a 55% tax for estates over $1 million in 2011.

The Senate Moves to Extend Unemployment Benefits & Homebuyers Tax Credit

 On October 27 the Senate voted 87-to-13 to take up the Unemployment Compensation Extension Bill of 2009 (HR 3548), which extends unemployment benefits and includes several tax amendments. On the 29th, the Senate announced a compromise that included extending the first-time homebuyer tax credit through 2010 and expanding the net operating loss carryback period.