President Barack Obama's jobs stimulus package, which calls for raising some taxes, reducing deductions and repealing various oil subsidies, is running into predictably fierce opposition.
As soon as the White House announced funding proposals that would raise about $467 billion, the plan came under attack by Republicans, who have firmly opposed any tax hike. In essence, the new proposals were a repeat of Obama's proposals in three previous budgets, which had been stalled in the Congress each time.
The administration proposes to raise $467 billion over 10 years by limiting itemized deductions and some other exemptions for individuals with adjusted gross incomes of $200,000 or more and married couples with income of $250,000 and above will feel the pinch.
The Republicans attacked the new tax plan, saying that it will stymie jobs growth, not support it.
It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past ... We remain eager to work together on ways to support job growth, but this proposal doesn't appear to have been offered in that bipartisan spirit, Michael Steel, a spokesman for House Speaker John Boehner, told the Wall street Journal.
Even Democrats do not expect the jobs bill to be passed intact.
Anything that is akin to a stimulus bill is not going to be acceptable ... Over half of the total dollar amount is so called stimulus spending. We have been there, done that. The country cannot afford more spending like a stimulus bill, House Majority Leader Eric Cantor, R-Va., said.
The president's plan proposes to cap itemized deductions at 28 percent. According to CNNMoney, what this means is that for every $100 in deductions the rich claim in 2013, they would be able to reduce their tax bill by only $28. That would be less than the $36 or $39.60 they would get if they are in the top two tax brackets.
According to the proposed plan, the new tax measure would go into effect on Jan. 1, 2013, when the top two income tax rates would revert to 36 percent and 39.6 percent, the report says.
Obama's funding plan envisages raising $40 billion by repealing various oil subsidies and $3 billion by tightening the depreciation rules of the purchase of corporate jets.
The president also plans to raise $18 billion over 10 years by taxing carried interest, a portion of the money paid to managers of hedge funds and other investments partnerships, as ordinary income. This would mean that this category can be taxed as high as 39.6 percent, more than double the current preferential rate of 15 percent.
Obama presented a $447 billion plan for boosting jobs last Thursday before a joint session of the Congress and urged immediate action to pass his plan, leaving aside political differences.
The three-pronged jobs plan's components are a $245 billion tax cut proposal, $140 billion worth of infrastructure programs and $62 billion employment assistance.