In an effort to cover the cost of his $447 billion jobs plan, President Barack Obama and the Democrats have proposed a 5.6 percent surtax on individuals who earn more than $1 million a year.
"It is time for millionaires and billionaires to pay their fair share to help this country thrive," said Senate Majority Leader Harry Reid (D., Nev.) in his announcement of the tax. Democrats say the tax, which would be imposed Jan. 1, 2013, will raise $450 billion over 10 years. Republican lawmakers are opposed to the surtax as a way to support the jobs plan. Billionaire Warren Buffett has publicly written that he supports higher taxes on the wealthy, but as a way to reduce the federal deficit.
The so-called millionaires' tax proposal is meant to replace earlier plans to limit the tax deductions for those earning $250,000 or more, which Republicans and some Democrats spoke out against.
The surtax would apply to all earned income, whether it comes from wages (top marginal tax rate is 35 percent) or capital gains (taxed at 15 percent for long-term holdings).
According to the Wall Street Journal, the bill is likely to be blocked by Republicans and some Democrats. But the hue and cry to tax the rich to either help reduce the federal deficit or otherwise improve the economic outlook doesn't seem to be fading.
Do you think a millionaires' tax should be imposed, and if so, should it go toward funding the jobs proposal or reducing the deficit?
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