Facing opposition in his caucus to the current package of new revenues in President Barack Obama’s jobs bill, Senate Majority Leader Harry Reid is considering replacing them with a five per cent surtax on those with incomes over $1 million.The move is largely a political stunt, after Reid himself was gamed by Republican leader Sen. Mitch McConnell on Tuesday. Members of the public overwhelmingly support Democrats’ efforts to tax the rich, while their spending proposals are less loved. Such a plan would be certain to fail, as House Republicans have pledged to kill any bill with new taxes.
The details on the tax, first reported by POLITICO, and confirmed by two Democratic sources on Capitol Hill, are still vague — but is being seen as a partial replacement for Obama’s deficit plan, which is has even dimmer prospects than the jobs bill.
The deficit bill included phasing out the Bush tax cuts on the wealthy and included the so-called “Buffett Tax,” which would set a minimum effective tax rate for those with incomes over $1 million.
“There is a wide range of things we’re looking at, because the only objections I heard from my caucus is dealing with the pay-fors,” Reid said on Tuesday, adding that Obama is OK with changing the revenue-raising side of the bill. “So, we’re resolving that issue as we speak.”
The current version of the jobs bill included eliminating most tax deductions on those earning over $200,000 and families earning more than $250,000 per year.
Obama has not waded into the legislative fight on his jobs plan, preferring to travel to congressional districts of high-profile GOP lawmakers to urge their constituents to back the plan.
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