Senate Democrats are working on a proposal to hike taxes on high-earners to ensure the Medicare program remains solvent for several more years, The New York Times reports.
Democrats are looking to impose a 3.8% tax on income earned through pass-through businesses, like law firms or medical offices.
The new tax would apply to people earning over $400,000 per year and couples or estates earning over $500,000 per year.
President Joe Biden previously proposed a similar tax to help fund parts of his Build Back Better package.
Will it help?
The Joint Committee on Taxation estimates the measure could raise about $202 billion over the next decade.
The Office of the Actuary in the Centers for Medicare and Medicaid Services told Senate Democrats that the revenue could extend the program’s hospital trust fund’s solvency by three years, form 2028 to 2031.
What about Manchin?
Though West Virginia Sen. Joe Manchin has opposed some measures proposed by Democrats, this proposal appears aimed at shoring up his support after he demanded the party bolster the existing Medicare program before extending new benefits.
Manchin also supports a proposal to allow Medicare to negotiate certain drug process.
“Medicare is a lifeline for millions of American seniors and Senator Manchin has always supported pathways to ensure it remains solvent,” Manchin spokesperson Sam Runyon told the Times. “He remains optimistic there is a path to do just that.”
