BILL SHIFTS INCOME CUTOFF DOWN TO $200,000...
JUST $40B COMES FROM OIL, GAS TAXES...
TAB FOR CORP JET OWNERS: $3 BILLION...
Obama to Tout Jobs Act at Donor's Company...
GOP Balks at Taxes to Finance Jobs Plan
By CAROL E. LEE And JANET HOOK
wsj.comSeptember 13, 2011
The prospects for President Barack Obama's $447 billion jobs plan grew dimmer Monday as he unveiled the fine print of how it would be paid for—primarily through tax increases that Republicans said would destroy jobs, not create them.
Mr. Obama proposed limiting itemized deductions for families with taxable income of $250,000 or more a year, ending tax breaks for oil companies and corporate jet owners, and cutting out a tax break for investment-fund managers. The White House says the tax changes would take effect in 2013 and estimates they would raise $467 billion in additional revenue over 10 years.
Republicans in Congress, who had been striking a more conciliatory tone about backing at least parts of the proposal the president unveiled last Thursday, disputed the White House contention that the plan would cause no additional job losses for the struggling economy.
"It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past,'' said Michael Steel, a spokesman for House Speaker John Boehner (R., Ohio). "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.''
Mr. Obama made a new pitch for his plan at the White House Monday and has said he intends to campaign against Congress and Republicans in 2012 if they don't pass the bill.
"We've got to decide what our priorities are," he said. "Do we keep tax loopholes for oil companies, or do we put teachers back to work? Should we keep tax breaks for millionaires and billionaires, or should we invest in education and technology and infrastructure?"
Despite Mr. Obama's demand that Congress act on the legislation quickly, neither the jobs nor tax proposals are likely to be approved or take affect any time soon. Senate Democratic leaders are expected to bring the bill to a vote in the coming weeks, but it is not expected to pass.
More likely some of the proposals in the bill could be passed piecemeal or could be included in a broader deficit-reduction plan crafted by a congressional supercommittee charged with finding at least $1.2 trillion in savings over the next 10 years. Mr. Obama will submit his own deficit plan of more than $2 trillion over 10 years to the committee on Sept. 19, administration officials said. That plan will include budget cuts, including to programs such as Medicare, not just tax increases like the ones he's proposing to pay for his jobs bill, administration officials said.
The congressional committee faces a Nov. 23 deadline to agree on what to include in the deficit-reduction package, which would be put to Congress for an up or down vote by Dec. 23.
From the outset, Republicans said Mr. Obama's jobs bill—which comprises tax cuts for employers and employees and a raft of government spending measures, including funds to states to rehire teachers and first responders—was unlikely to pass intact, a point White House officials privately conceded. But GOP leaders had signaled in recent days that they may support an extension of a payroll-tax cut in 2012 and changes to help the long-term unemployed.
Despite the White House's hope that Republicans would have a change of heart after their political standing decreased after the acrimonious debt ceiling debate this summer, GOP reaction to Mr. Obama's proposal on Monday expressed a familiar sentiment, although in a less combative tone. House Majority Leader Eric Cantor (R., Va.) said the parts of the jobs bill involving spending aimed at stimulating economic growth were unacceptable to Republicans.
"Anything that is akin to a stimulus bill is not going to be acceptable," he said. "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."
The largest chunk of Mr. Obama's tax package comes from limiting itemized deductions for families with more than $250,000 in yearly taxable income and individuals with more than $200,000, including those for home-mortgage interest, state and local property taxes and charitable donations. The White House says that measure would raise roughly $400 billion over 10 years.
For those affected, the proposal would limit the value of itemized deductions to 28 cents for each dollar of income deducted. Currently, the value of deductions for higher-income earners can be as much as 33 cents or 35 cents on the dollar because they're in the 33% and 35% tax brackets.
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