Reid Pitches Tax on Those Making More Than $1 Million to Fund Jobs Plan
Updated 8:00 p.m. ET with correction
CAPITOL HILL | Senate Majority Leader Harry Reid has proposed replacing the tax increases offered by President Obama to pay for the president’s $447 billion dollar jobs package with a surtax on millionaires — raising the top rate to 39.6 percent on individuals with an adjusted gross income of more than $1 million.
Reid brokered this new wrinkle in a closed-door meeting of fellow Democrats Tuesday in an effort to avoid an internal squabble in the Senate against the president’s plan for paying for the jobs package.
Trying to head off a revolt by a number of his fellow Democrats, both Reid and his majority whip Sen. Dick Durbin said at a press conference Wednesday morning that some of these changes are designed to win over undecided Democrats, many of whom are against any tax increases.
Reid said he would move to have “the richest of the rich” pay a little bit more.
“Independents, Democrats, Republicans and even the Tea Party agree it’s time for millionaires and billionaires to pay their fair share of taxes. We’re going to propose that people making more than $1 million a year pay 5 percent more to fund job creation to ensure this country’s economic success,” Reid said.
At Wednesday’s press briefing, White House press secretary Jay Carney said of the plan “if we have to make choices here, that this trade-off is an acceptable one whenever the revenue increases kick in, because of the urgent need we face to address an economic problem.”
Reaction on the tax increase proposal from the GOP side of the aisle was swift. Sen. Orrin Hatch of Utah, ranking member of the Senate Finance committee, issued an immediate reaction:
“The definition of insanity is doing the same thing over and over again and expecting different results. This tax hike was a bad idea in 2009 and it’s a bad idea today.” said Hatch. “Some of my Democratic colleagues were right to reject a similar proposal when they controlled both chambers of Congress. Given the weak state of our economy, they’d be wise to reject it again,” he emphasized.
Sen. Reid and Democratic leaders are targeting several Democrats like Mark Begich of Alaska, Mark Udall of Colorado and Kay Hagan of North Carolina, who expressed disapproval on how to pay for the president’s jobs plan.
Begich was pushing the millionaire’s tax as an offset. [This section has been updated, please see correction at the bottom] In addition, Sen. Mary Landrieu of Louisiana has joined Begich in opposing a proposal to eliminate tax breaks for oil and gas companies.
Durbin said the offsets or so-called “pay-fors” … “would be debated, and we’ll decide what’s likely to pass, but it will be very close to the president’s approach.”
Majority Leader Reid said he would try to bring the jobs bill to the Senate’s attention in the next few days, following the consideration of the free-trade deals with South Korea, Columbia and Panama.
In the House, Majority Leader Eric Cantor has refused to call up the president’s jobs bill, but he has left the door open to blending parts of his plan with GOP proposals. The House Ways and Means Subcommittee on Human Resources plans a hearing on Thursday on unemployment benefit changes in President Obama’s bill.
Correction: An earlier version of this story incorrectly stated that Colorado Sen. Mark Udall has raised concerns about offsets to pay for President Obama’s jobs plan. Udall’s office says that the senator supports President Obama’s jobs plan and has not raised concerns about such offsets.
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