Democrats Drop Millionaire Tax Proposal

By: EW News Desk Team   Date: 15 December 2011

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15 December 2011

Democrats are thrashing plans to impose a tax on millionaires as the Congress attempts to find its way out of a high-profile year-end spending dispute.

According to latest reports by Reuters, Obama discussed abandoning the surtax, which Republicans have been quick to criticise as a levy on job creators.

Despite Obama’s signal of willingness to drop the proposed millionaire tax, the Democrats remain at odds with the Republicans over the extension of an expiring payroll tax for 160 million Americans and the expiration of jobless benefits for people without work for the longest.

According a Senate Democratic leadership aide, Democrats are willing to drop their surtax demand, provided the Republicans abandon efforts to expedite approval of the Keystone XL oil pipeline – a western Canada pipeline that would bring oil to the Texas Gulf Coast.

Related Story: Dirty Oil, Dirty Tactics – The Keystone XL Pipeline: Jody Williams & Desmond Tutu

Related Information: The Keystone Pipeline

Democratic lawmakers, including Dianne Feinstein of California and Bob Casey of Pennsylvania, said yesterday that the priority for lawmakers should be an extension of the payroll tax cut even if that means abandoning the surtax. Casey, who sponsored legislation that included the millionaire’s surtax and was blocked in the Senate, said he doubts Republicans would ever support raising taxes for high earners.

“It seems that if we went to 0.1 percent, Republicans would reject that, too,” he said in an interview with BusinessWeek.

The most important thing that we’ve got to get done is extending the payroll tax cut.

Senator Charles Grassley, an Iowa Republican and senior member of the Finance Committee, has supported measures to extend the payroll tax cut without paying for it with the surtax. Eliminating the levy would be seen as “overcoming the number one objection that Republicans have had.”

At the same time, Grassley echoed a reluctance shared by many Republicans – i.e. Keystone had to be expedited as a tool to create jobs, despite the Democrats concerns over the environmental effects.

Related: Warren Buffett: I want to pay more taxes!

Related: French billionaires call for higher taxes


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