Senate Dems want millionaire surtax to pay for Obama jobs bill

Senate Democrats have jettisoned President Obama’s proposal to raise taxes on families making more than $250,000, raising the threshold to $1 million in an attempt to win more Democratic votes. 

Democratic leaders say they want to impose a 5 percent surtax on the tax liability of millionaires, which would raise about $445 billion over 10 years — roughly the cost of Obama’s jobs proposal.

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Even with the overhaul of Obama’s jobs package, Senate Majority Leader Harry Reid (D-Nev.) said he was not certain it would gain unanimous Democratic support. But Democratic leaders believe the change will broaden the bill’s popularity in their caucus.

“We’re going to move to have the richest of the rich pay a little bit more,” Reid said at a Wednesday press conference.

“Drawing the line at a million dollars is the right thing to do. In the eyes of many, it is hard to ask more of households that make $250,000 or $300,000 a year. They are not rich,” said Sen. Charles Schumer (N.Y.), chairman of the Democratic Policy Committee. "In large parts of the country that kind of income does not get you a big home or lots of vacations or anything else that is associated with wealth in America."  


Schumer, who represents New York’s borough of Manhattan, one of the wealthiest parts of the country, and the rich enclaves of Long Island and Westchester County, has long pushed to raise the threshold on raising taxes to a million dollars. He argues it’s a cleaner political argument for Democrats to make.

On Wednesday, Schumer said raising taxes on families earning more than $250,000 a year, as Obama has long supported, would affect small businesses, an argument that is more associated with Republicans than Democrats.

"It also would affect too many small businesses if you drew the line below a million dollars," he said. "There are businesses, small businesses, that struggle. So we believe the million dollars is the right line because in many parts of the country there are two-income households that earn that much. That doesn’t make them rich."

Schumer said families and businesses that earn between $250,000 and $1 million are "firmly in the middle class."