Senate Democrats: 5% Tax on Millionaires

With President Obama's jobs bill stalled in Congress, Senate Democrats have come up with a new way to pay the bill's $447 billion cost -- a 5% tax on people making more than $1 million per year.

Obama's original proposal called for eliminating tax breaks for the rich, but the definition of "rich" was those making more than $250,000 per year. Sen. Charles Schumer said on Wednesday that is too low.

"In the eyes of many, it is hard to ask more of households that make $250,000 or $300,000 a year," Schumer said. "They are not rich, and in large parts of the country, that kind of income does not get you a big home or lots of vacations or anything else that's associated with wealth in America."

The New York Daily News reports that he added that taxing those earning less than $1 million per year would hurt small businesses.

Senate Majority Leader Harry Reid said this 5% tax would affect less than 1% of people in the country.

Republicans have been dead-set against any tax increases, saying they are job killers, so this new proposal is unlikely to be met with great enthusiasm among the GOP.


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