CNN:

Senate Majority Leader Harry Reid is considering a provision to raise payroll taxes for the wealthy as part of a health care bill, a Democratic source told CNN. [. . .] Reid is considering an increase in the Medicare tax for individuals with income exceeding $250,000. The current Medicare deduction is 1.4 percent of income. The idea is an alternative to the Senate Finance Committee's proposal to tax so-called "Cadillac" health insurance plans that offer broad coverage at a much higher-than-average price.

The House proposal would fund health care reform through an income surtax of 5.4% on income above $500k. The House proposal is utterly superior to the rumored Reid plan, because it would apply to all income above $500K (including capital gains and dividends), not just payroll income. Clearly, Reid is trying to co-opt the Democratic Senators who make it their life's work to protect the rich (think Evan Bayh and Blanche Lincoln and the estate tax.) That said, Reid's proposal is eminently superior to the excise tax preferred by the Village Wonks and contained in BaucusCare.

Speaking for me only