Pelosi signals movement on surtax

PELOSI SIGNALS MOVEMENT ON SURTAX…. As of last week, most of the House Democratic leadership was prepared to pay for health care reform with a graduated surcharge, or “surtax,” on the very wealthiest Americans. As written, it would apply to only 1.2% of Americans, leaving the vast majority unaffected.

Yesterday, House Speaker Pelosi signaled her willingness to narrow this even more.

Trying to sell a historic health bill to a balky caucus, House Speaker Nancy Pelosi told POLITICO in an interview that she wants to soften a proposed surcharge on the wealthy so that it applies only to families that make $1 million or more.

The change could help mollify the conservative Democrats who expect to have a tough time selling the package back home. Their support is the single biggest key to meeting the speaker’s goal of having health care reform pass the House by the August recess.

The bill now moving through the House would raise taxes for individuals with annual adjusted gross incomes of $280,000, or families that make $350,000 or more.

“I’d like it to go higher than it is,” Pelosi said Friday.

The speaker would like the trigger raised to $500,000 for individuals and $1 million for families, “so it’s a millionaire’s tax,” she said. “When someone hears, ‘2,’ they think, ‘Oh, I could be there,’ because they don’t know the $280,000 is for one person.

“It sounds like you’re in the neighborhood. So I just want to remove all doubt. You hear ‘$500,000 a year,’ you think, ‘My God, that’s not me.'”

The details of this are a little unclear. Would Pelosi seek higher surcharges on millionaires, or seek additional revenue streams to make up the difference?

Either way, part of me wonders whether this was the goal all along — start with a surtax on families that make $350,000 or more, wait for the uproar, and then negotiate the figure upwards.

Whether this will constitute welcome progress among Blue Dogs remains to be seen.