Schumer: Let tax cuts for millionaires expire

U.S. Sen. Charles Schumer (D-N.Y.) speaks at the

U.S. Sen. Charles Schumer (D-N.Y.) speaks at the Empire State Pride Agenda's fall dinner in Manhattan. (Oct. 14, 2010) (Credit: AP)

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WASHINGTON - To reduce deficits, help the middle class and reach a compromise on the Bush tax cuts, Sen. Charles Schumer says: tax millionaires.

In his first statement on where to draw the line in extending the Bush tax cuts expiring at year's end, the New York Democrat said they should be maintained for those making up to $1 million, but not for those who make more.

"I think that certainly given the deficit, people who make over $1 million should get no extra tax cuts," Schumer said in an interview Friday.

Schumer is voicing an evolving view by Democratic leaders about what it will take to pass a bill that ensures the middle class doesn't get hit with what effectively would be a tax hike.

Vice President Joe Biden, for example, told Bloomberg television Friday the administration may be open to extending the Bush-era tax cuts to higher income households.

President Barack Obama proposes a dividing line of $200,000 for individuals and $250,000 for families, keeping tax cuts for those below the line but not for those above it.

Republicans say the tax cuts should be extended permanently for all, including the rich.

Schumer's GOP rival Jay Townsend said jobs won't be created by taxing job creators or by "playing class warfare."

He added, "The senator's position on this matter seems to be evolving by the hour." Schumer and Townsend are set to debate Sunday in Poughkeepsie.

By raising the line to $1 million, Schumer joins other New York lawmakers, particularly those on Long Island, who say the $250,000 threshold is too low as a definition of middle class in a high-cost area.

Why tax millionaires? he asked. They do fine now, the deficit needs a trim, and the middle class, not millionaires, need tax cuts to spend again.

When Congress returns next month, it must decide what to do about the tax cuts passed in 2001 and 2003. Set to expire on Dec. 31, the rates would revert to their level in 2000.

"I think doing this will help us get it done," Schumer said. "There are going to be a good number of Democrats that say we need to move the line to $1 million. Republicans are on our side, particularly if you raise it to a million."

Obama's plan would boost tax revenue by $678 billion over 10 years, the Joint Economic Committee found.

Schumer's plan would tax an estimated 315,000 households that make more than $1 million, and would raise more than $500 billion over 10 years.

Keeping the tax cuts for all would cost $2.805 trillion in lost revenue over 10 years, according to the nonpartisan Congressional Research Service.

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