Seeking to consolidate party support for President Obama’s jobs bill, Senate Democrats are considering a proposal to impose a five percent surtax on millionaires to pay for the legislation, according to two party aides.
As currently written, Obama wants the joint Super Committee to increase its deficit reduction target by enough to pay for the whole jobs bill. That way its cost could be offset by spending cuts and revenue measures and other reforms that have bipartisan support. But failing that, Obama’s bill would trigger a series of new taxes on wealthy Americans, including oil and gas companies, hedge fund managers and others.
This enforcement mechanism caused some strife in the Democratic caucus. Now, driven by party leadership and Sen. Max Baucus (D-MT), whose powerful Finance Committee has jurisdiction over the jobs bill, they’re considering a simpler, less parochial, and thus less divisive measure.
A Senate Dem aide cautioned that nothing’s final yet, and the party could ultimately settle on different measures. And there’s a history of broad Democratic support for raising taxes on millionaires.
During the health care debate in 2009, House Democrats backed a similar surtax on millionaires that would have raised over $500 billion over 10 years — more than enough to pay for Obama’s bill. Republicans and conservative Senate Democrats objected, and the measure didn’t make the cut in the final bill.
During the tax fight last December, Sen. Chuck Schumer (D-NY) proposed a creating a new millionaires tax bracket, rather than letting the Bush tax cuts expire for income above $250,000. It failed to overcome a filibuster but garnered broad Democratic support. And it also would have more than paid for Obama’s jobs bill.
That’s why something along these lines seems likely to bring most, if not all, Dems into the fold.
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Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at email@example.com.