Dem Senator Warns of 'Big, Big Tax' on Middle Class

With the several myths and rumors going around about the health care reform package, it is getting difficult for taxpayers to understand how the bill is going to get paid for. As such, Democratic Senator Jay Rockefeller (W.VA) has warned that another bill that is being worked on by the Senate that is full of tax hikes on the American middle class. ABCNews.com has posted this interesting article on the Senator’s warnings, which you can find a snippet of below.

It's not every day that you hear a Democratic senator charge that a fellow Democrat is proposing to raise taxes on the middle class, but that is what happened on Tuesday when Sen. Jay Rockefeller, D-W.Va., ripped into the health-care bill developed by Sen. Max Baucus, D-Mt., the chairman of the Senate Finance Committee.

The Baucus proposal would impose, starting in 2013, a 35 percent excise tax on insurance companies for "high-cost plans" -- defined as those above $8,000 for individuals and $21,000 for family plans.

Health economists believe a tax on high-priced benefits could help slow the growth of health costs by making consumers more sensitive to prices.

The tax contemplated by Baucus is also a big revenue raiser. It is expected to raise $200 billion, money that Baucus is hoping to use to pay for subsidies for the uninsured.

Given how much money this kind of tax can raise, Rockefeller says he understands why it is "tempting."

Obama to Raise Taxes on Middle America?

Although his biggest tax related campaign promise was NOT to raise taxes on anyone making under $250,000, it looks like the administration may be planning to do so anyway. According to new reports, Obama's treasury secretary warned that he could not rule out the idea of higher taxes on middle-class Americans as part of their health care reform package.

As the White House sought to balance campaign rhetoric with governing, officials appeared willing to extend unemployment benefits. With former Federal Reserve Chairman Alan Greenspan saying he is "pretty sure we've already seen the bottom" of the recession, Obama aides sought to defend the economic stimulus and calm a jittery public.

Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers both sidestepped questions on Obama's intentions about taxes. Geithner said the White House was not ready to rule out a tax hike to lower the federal deficit; Summers said Obama's proposed health care overhaul needs funding from somewhere.

"There is a lot that can happen over time," Summers said, adding that the administration believes "it is never a good idea to absolutely rule things out, no matter what."

During his presidential campaign, Obama repeatedly vowed "you will not see any of your taxes increase one single dime." But the simple reality remains that his ambitious overhaul of how Americans receive health care -- promised without increasing the federal deficit -- must be paid for.

"If we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through health care reform," Geithner said. "We're not at the point yet where we're going to make a judgment about what it's going to take."