By Alexander Bolton - 07/12/11 05:05 PM EDT
Sen. Jim Webb (D-Va.) on Tuesday said he would oppose any tax increases on regular earned income, undermining Senate Democratic plans to end the Bush-era tax cuts for millionaires in a deficit-reduction agreement.
“I have consistently opposed the notion of increasing revenues through raising taxes on ordinary, earned income — those amounts, whether large or small, that Americans take home as part of their every-day work and their basic compensation packages,” Webb said in a statement.
Webb added that he would support raising tax rates on the profits earned by investment managers, which is known as carried interest, and through eliminating ethanol subsidies.
“Revenues should be raised by other means, including ending costly subsidies and tax loopholes or by adjusting such measures as capital gains,” he said.
Webb noted that in 2009 he introduced legislation to impose a one-time windfall profits tax on bonuses above $400,000 paid to executives whose companies received substantial help from the Troubled Asset Relief Program.
Webb said taxing hedge fund managers' carried interest, eliminating tax subsidies and taxing profits earned from federal bailouts “could reduce the federal deficit by hundreds of billions of dollars and restore a measure of fairness to the tax code.”