As a way to pay for the billions of dollars required to revamp the nation’s health care system, a New York congressman is suggesting the possibility of a new tax on unearned income such as capital gains.

Charles Rangel

House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) told Bloomberg that expanding the Medicare payroll tax to cover unearned income may be preferable to a provision in the Senate’s reform bill to tax the most expensive, or “Cadillac” health plans. President Barack Obama supports the idea of taxing the most important plans, even as labor leaders criticize the plan, saying it will hurt membership in their organizations.

The Senate provision calls for a 40% tax on health insurance premiums exceeding $8,500 for individuals or $23,000 for families.

At a meeting later today (Jan. 13) at the White House, Rangel said he plans to discuss how to pay for health care reform.

He compared the proposed new tax as “comparable” to the surtax that House Democrats want to impose on the highest-income individuals, according to Bloomberg. That provision seeks a 5.4% income tax on single individuals who earn more than $500,000 annually and couples earning more than $1 million per year.