Policy-ish

This Health Tax Trial Balloon's Not A Hoax...

Well, maybe it is. But unlike the Heene parents, its perpetrators won't get sent to jail. The balloon we're talking about is of the test variety.The proposal now being floated would help pay for the health overhaul bill by expanding the Medicare payroll tax beyond the payroll to cover investment income, too.

It would be, says Medicare expert Marilyn Moon, "a very big sea change" in the way Medicare is financed. Although as it's being discussed on Capitol Hill, it would only apply to high income earners. And, it might just be a way to help the Democrats back away a tad bit from relying so heavily on the Cadillac tax, which is causing discord with the unions, to finance the bill.

Moon, a former public trustee for the Medicare program now at the American Institutes for Research, says she understands the appeal of the idea. "We get more of our income from other sources than used to be the case 30 or 40 years ago. So from that standpoint I can understand why people might tap another source such as investment income," she says.

But at the same time, she said she worried about such a big change coming as negotiations near the eleventh hour.

"When you add something new out of left field there's always the concern that it hasn't been carefully vetted and people haven't thought through all the implications," she says.

But Longtime federal budget watcher Stan Collender says he thinks new ideas are the future of funding legislation like the health bill.

"One of the things that people are going to have to get used to is that traditional spending cuts and typical tax increases on income just won't fly anymore. We know that they're politically unacceptable," he says. "So new ideas, things that haven't dared been mentioned before, or just innovative ideas that have never come up before are likely to be much more likely in the future than anything that we've seen in the past."

You can hear more from Moon and Collender on tomorrow's Morning Edition.

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