(Bloomberg News) President Barack Obama asked lawmakers to again consider increasing taxes for high earners, private equity managers and oil and gas companies to pay for his $447 billion job-creation package, running into Republican resistance along the way.
The bill Obama sent to Capitol Hill yesterday included previously proposed revenue-raising provisions, such as a cap on deductions for upper-income taxpayers, which have failed to advance in Congress in recent years. The administration also proposed new ideas that would change longstanding tax policy. Obama wants to curb the amount of interest from municipal bonds that top earners could exclude from their income and require those taxpayers to count some of their employer-provided health insurance as taxable income.
Obama has proposed raising $18 billion by taxing the carried interest, or profits-based compensation, of private equity managers, real estate investors and venture capitalists as ordinary income, instead of more lightly taxed capital gains. That would affect companies including Blackstone Group LP and KKR & Co.
The release of the plan sets up a political fight with Republicans in Congress that will frame Obama's strategy for a re-election campaign next year.
Revenue Raisers
Obama would use the revenue in part to offset the cost of cutting the payroll tax for employers and middle-class taxpayers along with infrastructure programs. Republicans, who control the House of Representatives, have signaled they may be willing to support some of the tax cuts while expressing skepticism about Obama's spending and tax increase proposals.
"If the president is truly interested in growing the economy and putting Americans back to work, then he'll leave the temporary proposals and the half-measures -- and the tax hikes - - aside," Senate Minority Leader Mitch McConnell, a Kentucky Republican, said on the Senate floor today.
House Majority Leader Eric Cantor said Republicans won't accept tax increases as part of a plan for economic growth.
"My sense is that we need to work very hard to try and peel off the things that we can actually agree on," the Virginia Republican told reporters today.
Obama would sign a bill even if it contained only some provisions of his proposal, White House press secretary Jay Carney said.