Reuters reports: "The U.S. House of Representatives healthcare overhaul bill expected to be unveiled on Tuesday will include surtaxes on the wealthy starting in 2011 and rising in 2013 if more money is needed to pay for its programs" -- with the wealthy being defined as families making more than $350,000 dollars a year. As the Wall Street Journal reports:

This would hit job creators especially hard because more than six of every 10 who earn that much are small business owners, operators or investors, according to a 2007 Treasury study. That study also found that almost half of the income taxed at this highest rate is small business income from the more than 500,000 sole proprietorships and subchapter S corporations whose owners pay the individual rate.

In addition, many more smaller business owners with lower profits would be hit by the Rangel plan's payroll tax surcharge. That surcharge would apply to all firms with 25 or more workers that don't offer health insurance to their employees, and it would amount to an astonishing eight percentage point fee above the current 15% payroll levy.

On this second point I would like to quote a multi-industry letter we have just sent to the House:

We are specifically concerned with a proposal to mandate that employers either provide health insurance or pay a new eight percent payroll tax. The House “pay or play” proposal is even more troublesome because employers are also mandated to pay the majority of employee premiums...Congress should allow market forces and employer autonomy to determine what benefits employers provide, rather than deciding by fiat...

A few more points from the letter (or go read the whole thing):

• Coverage decisions would also be set by a new Health Benefits Advisory Council...We urge Congress to leave these decisions between providers, patients, insurers, and plan-sponsors – not to dictate them from Washington.

• Employers currently suffer a significant cost-shift from existing public programs, and the program described in House legislation would significantly increase costs for every American who purchases private insurance.

• We are also concerned that the government plan will not be a fair competitor, and employers will not be able to continue offering their current plans, which cover more than 170 million Americans.

• We urge Congress to focus on consensus areas that can accomplish our shared goals. Chief among these should be initiatives to improve quality and lower costs, introducing fair regulation of the insurance market, and building a robust marketplace for consumers.

And one more from the Wall Street Journal:

Democrats claim these tax increases on the rich won't do any economic harm. They should read the work of Christina Romer before she became chief White House economist. Ms. Romer and her husband, David Romer, a Berkeley economist, have published multiple studies on the impact of tax policy changes over the past 100 years. One of their findings is that "tax increases appear to have a very large, sustained and highly significant negative impact on output." In other words, tax hikes are an antistimulus.