October 6, 2011 By

Senate Democrats add millionaire tax to jobs bill

WASHINGTON (AP) — Struggling to deliver the big jobs package proposed by President Barack Obama, Senate Democrats are using the issue to force Republican senators to vote on tax increases for millionaires, picking up on a White House theme that the nation’s wealthiest Americans aren’t paying their fair share.

Senate Democrats said Wednesday they were changing Obama’s jobs package to add a 5.6 percent tax on income above $1 million, a proposal that is sure to be blocked by Republicans.

The $447 billion package still includes Obama’s proposals to cut payroll taxes and provide money for teachers, firefighters, the unemployed and infrastructure. The tax on millionaires is expected to pay for the package, so it wouldn’t add to the budget deficit.

Democrats are banking on Republicans to oppose both the higher taxes on million-dollar earners and the president’s call for new spending aimed at reducing joblessness, leaving them open to a charge of protecting the wealthy at the expense of the unemployed.

“Republicans will be hard pressed to explain why they allowed teachers and firefighters to be laid off, rather than have millionaires and billionaires pay their fair share,” said Sen. Chuck Schumer, D-N.Y. “Republicans will struggle to defend putting off repairs to crumbling schools in order to protect tax breaks for the wealthiest 1 percent of America. This is the contrast that will be on display in the Senate next week.”

Senate Majority Leader Harry Reid, D-Nev., said he plans to bring the bill up for a vote in the Senate next week, though without Republican support, it won’t get the 60 votes needed to advance. Republican leaders said they won’t support tax increases, even on the wealthy, because they would hurt an already weak economy.

“I understand our Democrat friends want to jettison entire parts of the bill altogether – not to make it more effective at growing jobs, not to grow bipartisan support,” said Senate Republican leader Mitch McConnell of Kentucky. “No, they want to overhaul the bill to sharpen its political edge.”

The new 5.6 percent tax would be applied to adjusted gross income above $1 million – that’s income before itemized deductions are subtracted – 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.

This article was written by STEPHEN OHLEMACHER; full article at AP

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