Obama’s jobs bill getting a Senate rewrite

Senate Democrats are rewriting portions of President Barack Obama’s jobs bill to include a new 5% tax on income above $1 million—a proposal analysts say is sure to be blocked by Republicans. Senate Majority Leader Harry Reid, D-Nev., says he is changing the president’s plan to make sure the nation’s wealthiest families pay their fair share, picking up on a theme the White House has promoted throughout this year’s budget battles. The changes won’t affect any of Obama’s proposals to cut payroll taxes or provide money for teachers, firefighters and infrastructure improvements. The changes are expected to attract more votes from Democrats, though Reid wouldn’t predict whether Senate Democrats would unite behind the measure, which is unlikely to get support from any Republicans. Reid says he plans to bring the bill to the floor next week. The new tax would replace tax increases sought by the president. Obama’s plan called for raising taxes by limiting itemized deductions—including those for charitable donations and mortgage interest—for individuals making more than $200,000 and married couples making more than $250,000. Reid says the millionaire’s tax would cover the entire cost of Obama’s jobs bill—about $450 billion over the next decade. The new 5% tax would be applied to adjusted gross income above $1 million, including income from capital gains and dividends. The top tax rate on earned income is currently 35%. The top capital gains tax rate is 15%.