WASHINGTON — Senate Democratic leaders are proposing a
5 percent surtax on those earning $1 million a year as a new way to pay
for President Barack Obama’s jobs plan, turning to an issue with
populist appeal as they line up support for a vote, possibly next week.
The
shift is an acknowledgment that the president does not have support
among his Democratic allies for taxing those earning less than $1
million. Obama’s proposal had relied on tax increases for households
earning more than $200,000, or $250,000 for couples.
“We’re
going to move to have the richest of the rich pay a little bit more,”
Sen. Harry Reid, D-Nev., the majority leader, said Wednesday. A vote is
expected “within the next few days,” Reid said.
Democratic
leaders in the Senate have slow-walked the president’s proposal since
it was first introduced last month, knowing they would have difficulty
securing support from some within their ranks. Several conservative
senators or those up for re-election next year have opposed any new
taxes. Others argue that the upper-income tax hikes Obama proposed would
snare small business owners.
Polls this fall have
repeatedly shown that Americans overwhelmingly support higher taxes on
millionaires who make up less than 1 percent of taxpayers, fewer than
500,000 households.
Republicans in the Senate are expected to launch a filibuster to block the bill. They have insisted on no new taxes.
The
surtax would hit all forms of income, including capital gains. It would
fully cover the $447 billion cost of Obama’s jobs proposal.
The
president is stumping around the country to build support for his
proposal that would provide money to hire teachers, firefighters and
other state workers, invest in roads and bridges, and provide tax breaks
to companies that make new hires. It would also continue a payroll tax
break that most working Americans enjoy that is set to expire at the end
of 2011.
The White House signaled that the president is open to discussing the millionaires tax idea.
“The
president’s goal is to grow the economy, put more money in the pockets
of the middle class, and put more Americans back to work, including
teachers, construction workers and veterans,” White House communications
director Dan Pfeiffer said. “As we have said from the beginning, we
offered a balanced way to pay for the American Jobs Act, but if Congress
has a better idea that ensures that everyone pays their fair share,
we’re open to it.”
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