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Senate Democrats rewrite part of Obama’s jobs bill
Senate Democrats are rewriting portions of President Barack Obama’s jobs bill to include a new 5 percent tax on income above US$1 million, a proposal that is sure to be blocked by Republicans.
Senate Majority Leader Harry Reid, D-Nev., said Wednesday he is changing the plan to make sure the nation’s wealthiest families pay their fair share, picking up on a theme the White House has promoted throughout this year’s budget battles.
Sen. Harry Reid of Nev., left, accompanied by Sen. Charles Schumer, D-N.Y
The changes won’t affect any of Obama’s proposals to cut payroll taxes or provide money for teachers, firefighters and infrastructure. The changes are expected to attract more votes from Democratic senators, though Reid wouldn’t predict whether Senate Democrats would unite behind the measure, which is unlikely to get any support from Republicans.
Reid said he plans to bring the bill to the floor next week.
The new tax would replace tax increases sought by the president. Obama’s plan called for raising taxes by limiting itemized deductions, including those for charitable donations and mortgage interest, for individuals making more than US$200,000 and married couples making more than US$250,000.
Reid said the millionaire’s tax would cover the entire cost of Obama’s jobs bill, about US$450 billion over the next decade.
Sen. Chuck Schumer, D-N.Y., said there was opposition to Obama’s plan because people making US$250,000 or US$300,000 in high cost areas, like New York, don’t consider themselves rich.
“Drawing the line at a million dollars is the right thing to do,” Schumer said. “In the eyes of many, it is hard to ask more of household that make US$250,000 or US$300,000 a year. They are not rich and in large parts of country, that kind of income does not get you a big home or lots of vacations or anything else that’s associated with wealth in America.”
The new 5 percent tax would be applied to adjusted gross income above $1 million, including income from capital gains and dividends. The top tax rate on earned income is currently 35 percent. The top capital gains tax rate is 15 percent.
Reid announced plans to move the bill as Obama tried to blame Republicans for Congress’ failure to act.
Obama traveled to Texas Tuesday to deliver his most caustic challenge yet to House Republicans who have not allowed a vote on the legislation unveiled nearly a month ago.
