House Democrats Seek Surtax on the Wealthy

WASHINGTON -- House Democrats are proposing a surtax on high-income earners -- valued at more than $50 billion over 10 years -- as a way to fund an expansion of education benefits for veterans, The Wall Street Journal reported Wednesday.

The proposal appears to have broken an impasse between House Democratic leaders, who want to include the education benefits in an emergency war-funding bill, and the fiscally conservative Blue Dog Democrats, who want the new costs to be covered with a tax increase or spending cuts elsewhere, the paper reported.

The proposal, which could come up for a House vote as soon as Thursday, would levy a 0.5 percent surtax on couples earning more than $1 million a year, and individuals earning more than $500,000 a year, Democratic aides said. The tax would apply only to the amount of income above those thresholds. That would raise about $54 billion over 10 years, just over the amount needed to fund the spending on veterans, the paper reported.

It is unlikely the proposal would make it through the Senate, and President Bush would likely veto it. But the surtax satisfied the demands of the Blue Dogs, who held up a vote on the war-spending bill last week by threatening not to support it. The surtax will allow House Democrats to stay in line with the pay-as-you-go budget rule, at least for the moment, the paper reported.

-- NYSSCPA.org News Staff

Posted on 5/14/08