Senate Democratic leaders on Tuesday proposed an economic package that would extend benefits for the long-term unemployed, renew business tax breaks and soften a proposed tax on fund managers profits.
The far-reaching plan, which Democrats hope will help cut into the 9.7 percent unemployment rate, extends payments for hundreds of thousands of unemployed Americans whose benefits lapsed at the end of May. To help pay for the bill, it would raise taxes on investment fund managers, but at a lower level than legislation approved by the House of Representatives.
With so many Americans out of work, our country needs Congress to enact this legislation, Senate Finance Committee Chairman Max Baucus said in introducing the bill. This bill continues valuable tax incentives to families and businesses that will help them in these difficult economic times.
The bill also would raise the oil trust fund tax to 41 cents per barrel from the current 8 cents per barrel.
The bill would restore funding to states for six months to help them pay for their Medicaid health program for the poor and extends expired business tax breaks, such as the research and development credit.
Under an $80 billion jobs bill passed by the House of Representatives last month, 75 percent of an investment fund manager's income would by 2013 be taxed as ordinary income rates, about 35 percent, compared with the current 15 percent capital gains tax treatment. The Senate bill would eventually tax 65 percent of profits at the higher ordinary income tax rate, with a break given to longer term investments.
Fund managers in private equity, real estate and the venture capital industry now pay capital gains rates on much of their profits.
(Reporting by Kim Dixon and Donna Smith; Editing by Eric Beech)