The White House, after dismissing a similar proposal late last year, left the door open to backing the plan. “We are open to different ways of paying for the very important broadly supported measures in the American Jobs Act that would grow the economy and create jobs,” said the press secretary, Jay Carney.
The new plan, devised by the Senate majority leader, Harry Reid, Democrat of Nevada, has a twofold purpose: to draw a sharp contrast with Congressional Republicans, who have dug in against any increases in tax rates, and to quell a revolt brewing among some Democrats who objected to parts of the White House plan.
Mr. Reid said the surtax would raise $445 billion over 10 years, just about the amount needed to pay for the jobs bill, though it appears unlikely it could make it through Congress.
The proposal, he said, would “have the richest of the rich pay a little bit more” — specifically, “5 percent more to fund job creation and ensure this country’s economic success.”
Mr. Reid’s proposal was to have taken effect in 2012. The White House suggested a one-year delay. Mr. Reid agreed. On Wednesday night, his office announced a change, saying: “The millionaires’ surtax will now take effect in 2013, not 2012. The surtax rate is also changed, to 5.6 percent from 5 percent.”
Many economists predict that the economy will still face serious problems, including high unemployment, in 2012, an election year. Mr. Reid made clear that he thought his party would gain a political advantage from the proposal.
“It’s interesting to note that independents, Democrats and Republicans and even the Tea Party agree it’s time for millionaires and billionaires to pay their fair share of taxes,” Mr. Reid said Wednesday.
The plan, pushed by Senator Charles E. Schumer of New York, the No. 3 Senate Democrat, comes after Mr. Obama earlier proposed a “Buffett Rule” that would force wealthy Americans to pay more in taxes. It also comes against a backdrop of protests against Wall Street, giving Democrats hope they can tap into some of that sentiment in next year’s elections.
Indeed, the Democratic proposal seems more about politics than policy. Even if wavering Democrats could be rounded up to support the president’s plan, Senate Republicans could block the proposal by denying Democrats the votes needed to overcome a near-certain filibuster.
Republicans, who control the House, scorned the new proposal.
In an interview with Bloomberg Television, the House majority leader, Representative Eric Cantor, Republican of Virginia, said: “Here we go again, continued insistence in Washington — raise taxes on job creators right now. That’s not what we need. Most people in America think it’s counterintuitive to raise taxes if you want economic growth.”
Details of the surtax proposal are still being worked out.
Congressional aides said it would probably work this way: The government would collect an additional tax equal to 5.6 percent of the amount of income exceeding $1 million. So for a person with income of $1.1 million, the extra tax would be $5,600, which is 5.6 percent of $100,000. Estimates from the Congressional Joint Committee on Taxation indicate that 330,000 households have more than $1 million of income, broadly defined.
The proposed surtax would apply to wages and salaries, capitals gains, interest, dividends and some other types of income, Congressional aides said.
Public opinion polls suggest some support for the Democrats’ approach.
In a recent CBS News poll, 64 percent of people said taxes should be increased on households earning $1 million a year or more and 30 percent said the government should address the budget deficit without increasing taxes on those households. Only a quarter said this tax increase would help job creation, 18 percent said it would hurt job creation and about half said it would not make a difference.
Jennifer Steinhauer contributed reporting.
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