Senate Democrats today proposed a 5% surtax on all income above $1 million as a way to pay for President Obama’s jobs bill—throwing out Obama’s more intricate suggestion for eliminating various tax deductions for the wealthy, oil companies, and other businesses. The surtax would hit all income, including dividends and capital gains, and would be enacted permanently, the Wall Street Journal reports. Harry Reid hopes to bring the new bill to the floor next week.
Charles Schumer said the move was aimed at millionaires, rather than everyone in the $200,000-plus-a-year tax bracket, because many of those households “are not rich,” and it would be “hard to ask more” of them. The move is designed to appease the Democrat holdouts on the bill, but it’s unclear whether it will. Ben Nelson has pledged to oppose all tax increases, and Joe Manchin’s issues with the bill were on the spending side, not the funding side. Even if all Democrats join him, Reid still would need seven GOP votes to fend off a filibuster. (Read more Harry Reid stories.)