Dems Pitch New Plan to Fund Jobs Bill: A Tax on Millionaires

bjbjLULU JEFFREY BROWN: Democratic leaders in the Senate proposed a millionaire's tax today to pay for President Obama's jobs bill. It would amount to an extra 5 percent on incomes over $1 million. The Democrats said it would cover the bill's entire cost, some $450 billion over 10 years. The new tax would replace the president's proposal to limit tax deductions for charity and mortgage interest, along with other measures, which didn't appear to have sufficient support to ensure passage. On the Senate floor today, Majority Leader Harry Reid and Minority Leader Mitch McConnell sparred over the proposed change. SEN. HARRY REID, D-Nev. majority leader: We may have different ideas on how to pay for it, but we know the present legislation is a smart, effective way to spur job creation. Democrats have listened to the American people and they have been very, very clear. The American people believe it's time for millionaires and billionaires to pay their fare share to help this country thrive. SEN. MITCH MCCONNELL, R-Ky. minority leader: The president's own party is the only obstacle to having a vote on his so-called jobs bill, and now I understand our Democratic friends want to jettison entire parts of the bill altogether, not to make it more effective at growing jobs, not to grow bipartisan support. No, they want to overhaul the bill to sharpen its political edge. JEFFREY BROWN: Todd Zwillich is covering the back and forth on Capitol Hill for "The Takeaway" from Public Radio International WNYC and joins us now. Welcome back. TODD ZWILLICH, "The Takeaway": Good to be with you. JEFFREY BROWN: So on the substance, it's pretty straightforward, right? TODD ZWILLICH: It is, a 5 percent surcharge on millionaires. The president will say millionaires and billionaires. And it's pretty simple to understand. This is a tax increase on the richest among us to do what Democrats and the president called shared sacrifice. The economy's in trouble. People have to get back to work. The president is going around the country saying pass this bill to get people back to work on construction projects, and this is how they want to pay for it: tax the rich. JEFFREY BROWN: This is how -- but one interesting aspect here is this is the Senate Democrats saying that the president's original notion wasn't going to work. TODD ZWILLICH: They didn't have the votes for it. Forget about Republicans for now. They didn't have a majority, probably, of Democrats for the president's original proposal. There were some things in there that you have to get a little bit parochial about. One of the tax increases... JEFFREY BROWN: The nature of it often, right? TODD ZWILLICH: And it is. And in a political season, everybody wants to help the president, everybody wants to help the party, but look at one of the tax increases that was in that bill, increased taxes on big oil, on royalties in oil revenue. Well, there's a Democratic senator from Louisiana, from the oil patch. That's Sen. Mary Landrieu. There's a Democrat from Alaska, Mark Begich. They weren't interested in voting for a tax increase on big oil. Even if this bill never becomes law, as a political proposition it doesn't make sense to do your best to support the president, even though you probably want to, when it's going to get you in trouble back home. JEFFREY BROWN: All right, so there's that aspect of politics and then there's the other aspect is just the calculation by the Senate Democrats that this plays to some sense of what the public will support. TODD ZWILLICH: Yes. And it really allows -- you saw the minority leader, Mitch McConnell, on the floor criticizing this effort, saying that all Democrats are trying to do is sharpen this as a political tool. He's got a point. The -- this notion of a millionaire's tax has gotten a majority of Democrats before. It got 53 votes on a similar vote back in December. But it polls very high. Where? It polls above 70 percent with independents, the very people that both sides are going after, but in particular the president is going after with this plan. It polls a little bit lower with Republicans but 57 percent of Republicans in a Washington Post/ABC poll say they favor raising taxes on the rich in order to help get the country out of economic doldrums. What this allows the president to do if you look at this as a political document, it allows him to go around the country. When you look at the president's jobs plan, it has more money so that teachers and firefighters can keep their jobs, so they don't get laid off, so that you can build interchanges and construction projects, things like that. This allows the president to make a very clear statement, which technically would be true. If Republicans vote against this, they're protecting tax considerations for the richest among us and they -- and they won't protect the jobs of teachers and firefighters. JEFFREY BROWN: Well, is there any indication they might be able to pull in any Republicans in some -- for this? TODD ZWILLICH: Democrats on the record say, of course, they would love as much Republican support as they can get. Privately, they say they expect none whatsoever. This is a tax increase. Republicans ideologically are against tax increases. And in 2012, Republicans are not amenable to helping out the president. JEFFREY BROWN: And on the House side, Eric Cantor continues to say this will not come whole to us, it will not pass. Maybe piecemeal. TODD ZWILLICH: Maybe piecemeal. He was very clear that this package as a whole package is dead. He said those words. He was asked if it was dead. He said yes. And you're right. The majority leader has said, we can go down a menu and pick little pieces of this, things that we agree on. The interesting part about picking little parts of this, some tax cuts, some regulatory relief, things that Republicans and the House and the White House say they agree on, as you pick little pieces of it, the question is, are those -- any of those pieces of the bill that they can agree on, are they job creators right now? Will it help create jobs now? Most of the economists say no because those things don't create demand. And that's part of the problem in Washington right now. As a political document, the majority leader says, well, we can get a win on the board. We can show America that we can agree on something. Will that something create jobs? Maybe not. JEFFREY BROWN: Well, as you're watching this unfold, do you see anybody -- is anybody talking to the other side now, or is this all about positioning what my particular side, one side or the other, has to put forward? TODD ZWILLICH: Right now, it's mostly about positioning. And when you see a proposal like millionaire's tax, that is a partisan proposal that is designed to give the president and Democrats that sharp tool that Mitch McConnell was talking about against Republicans. They may talk in the near future about the menu that they can agree on. The White House has said we don't want little pieces of this to come back from Congress, but if that happens, we will look at it. We might support little pieces. JEFFREY BROWN: And very briefly, any sense of when things get going, the next step? TODD ZWILLICH: Well, a lot of this may happen in the context of the super committee that has to report out language Nov. 23. So we're sort of looking at battles over October and into November. But we're looking at Senate votes on this new pay-for, this new bill, as early as next week. 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