Senate Dems call for 5% tax hike on millionaires to pay for jobs bill

Senate Majority Leader Harry Reid of Nev., right, joined by Sen. Charles Schumer, D-N.Y., speaks at a news conference on Capitol Hill in Washington, Wednesday,July 27, 2011, to discuss the conflicting plans to deal with the debt crisis.
AP Photo/J. Scott Applewhite

Updated: 3:36 p.m. ET

Senate Majority Leader Harry Reid on Wednesday called for a five percent surtax on Americans making more than $1 million to pay for President Obama's jobs bill.

Reid, in a press conference with Senate Democrats, said he would bring the jobs bill to the floor within the next few days, upon completion of the China currency bill.

"We're going to propose to pay for this important jobs legislation by asking people who make more than a million dollars a year to pay five percent more to fund job creation to ensure this countries economic success," Reid told reporters. "We're going to move to have richest of the rich pay a little bit more."

The Nevada senator pointed out that Democrats are not the only people who support the idea of wealthy Americans paying more in taxes.

"It's interesting to note that independents, Democrats, Republicans and even the Tea Party agree that it's time for millionaires and billionaires to pay their fair share of taxes," he said.

A recent CBS News pollshowed that 64 percent of Americans believe those making a million dollars or more should pay more in taxes. Democrats supported such a hike overwhelmingly (with 83 percent support) and independents also supported it, 65 percent to 28 percent. On the other side, 54 percent of Republicans opposed such an increase, while 40 percent supported it.

Sen. Chuck Schumer, D-N.Y., told reporters Senate Democrats had run the plan by the White House, and had been assured that the Obama administration was "fine with the idea."

He noted, too, that the financial bar had been raised to those earning $1 million or more - rather than Obama's proposed $250,000 - to accommodate the difficulties of the economic times.

"It is hard to ask more of households that make $250,000 or $300,000 a year," he said. "Many of they are not rich and 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." 

He said Senate Democrats thought the million dollar mark was the "right line" because "it is perfectly fair ask those making a million dollars a year or more."

Repeating a popular line among Democrats, Schumer again pressed for a "shared sacrifice."

"These tough economic times call for sacrifice - shared sacrifice - so we believe the best way to ensure this worthy package does not add to the deficit is to get rid of unneeded tax breaks for millionaires and billionaires," he said.

Reid argued that less than one percent of the American people would be affected by this offset, and that Republican objections to the plan represented a betrayal of their constituents' interests.

"They can hang on to their mantra 'no new taxes' but I would suggest that they're really not keeping in touch with their constituents," Reid said.

Senate Republican leader Mitch McConnell, R-Ky., pushed Tuesday for a speedy Senate vote Mr. Obama's jobs bill, even as Democrats rewrote portions to make it more widely acceptable among lawmakers.

Reid called the move "disingenuous" and wondered if it was an effort to derail the Chinese currency bill currently being taken up.

"It sort of looks almost like a subterfuge to block a China bill, which is very hard to oppose directly," Schumer said, of the move.

In a statement following the announcement, Michael Steel, a spokesman for House Speaker John Boehner, called the plan a "desperate" gimmick.

"Republicans have identified areas of common ground where we can work with the President and Democrats to create a better environment for job creation," Steel said. "That should be our focus, not desperate tax hike gimmicks floated to cover up divisions within the Democratic caucus."