Obama would raise taxes on rich to pay for jobs plan

WASHINGTON — President Barack Obama would pay for his jobs bill primarily by raising $467 billion in taxes on the wealthy over 10 years, the White House said Monday.

Obama included the proposed tax increases in the detailed legislation he sent Monday to Congress, along with a demand that the entire package be passed immediately.

"This is the bill that Congress needs to pass," he said in the White House Rose Garden, waving a copy of the proposed American Jobs Act. "No games. No politics. No delays. I'm sending this bill to Congress today, and they ought to pass it immediately."

His request amounted to a legislative and political impossibility.

First, Republicans argue that the first big Obama jobs "stimulus" bill in 2009 was a waste of money, and now they control the House of Representatives. Second, House Republicans say the Congressional Budget Office must analyze the new bill to see how much it would cost and how much economic impact it could have. Third, Obama couldn't get many of the same tax increases he's proposing again through Congress when his Democratic Party controlled both houses. Republicans now have power, and they flatly oppose tax increases on the wealthy.

"I do not think that the president's all or nothing approach is something that is constructive," said House Majority Leader Eric Cantor, R-Va. "To say 'pass my bill' 17 times is not, I think, the tone, nor is it the way forward."

The proposed $447 billion bill, which Obama outlined Thursday night in a speech to Congress, would include extended tax cuts for workers and jobless benefits for the out-of-work, a new temporary tax reduction for business and new federal spending to repair infrastructure.

He said then that he'd pay for the one-year package; the White House said Monday that it would all come from tax increases. They'd include:

  • Limiting itemized deductions for individuals who make more than $200,000 annually and families that earn more than $250,000. Total over 10 years: $400 billion.
  • Closing loopholes for oil and gas companies. Total: $40 billion over 10 years.
  • Raising taxes on investment fund managers. Total: $18 billion.
  • Raising taxes on corporate jets. Total: $3 billion.
  • Despite polls that find Americans tend to support higher taxes on the wealthy, Obama has been unable to convince Congress even when his party controlled both the House and Senate.

    Jacob Lew, the director of the White House Office of Management and Budget, said the president thought these tax increases were the right way to finance his bill. "The most fortunate have to be part of that," he said.

    Lew said the White House would unveil a broader proposal next week to curb long-term deficits that would include more than tax increases on the wealthy. "When you see the package next Monday, you'll see that the shared sacrifice is substantially broader than just the wealthiest Americans," he said.

    The White House refused to predict how many jobs the package would create. Aides there are painfully mindful of the fact that the White House promised in 2009 that a stimulus package then would push the unemployment rate below 8 percent, only to see it shoot higher than that.

    Cantor said Republicans also had ideas about stimulating the struggling economy, and that the House would look at all of them. "We have good ideas. He's got some good ideas," he said. "We can bring these together. Let's not allow the things in this bill that we disagree with to get in the way of producing some results."

    One possible roadblock, he said, is Obama's proposal to pay people to rebuild schools. "Anything akin to the stimulus bill is not going to be acceptable to the American people," he said. "Most folks understand that promises made surrounding the stimulus program were not kept. So I don't believe our members will be interested in pursuing that. I certainly am not."

    One possible area for negotiation: Obama's proposal to extend unemployment benefits along with making changes to them.

    "Most people in America are sympathetic to helping those who can't find jobs because unemployment's so high, but I also think that most people in America think you can't continue unemployment benefits forever," Cantor said.

    "The president's continued extension of this begs for a response which includes some type of reform of the system to instill some possibility that beneficiaries of this program can get back to work. So, yes, I'm supportive of reforming the system, making sure we tie any extension to a program that has and holds more promise to people (getting) back to work."


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