Schumer proposes $1M income ceiling for tax cuts

Offering what he dubbed a compromise on extending the Bush tax cuts, Sen. Charles Schumer (D-N.Y.) Sunday proposed making the lower rates permanent for all household income up to $1 million.

Schumer's move comes as Republicans, buoyed by the midterm electoral victories, have called for making the tax cut permanent for all incomes, while President Barack Obama and leading Democrats have said the tax cut should apply only to incomes lower than $200,000 for individuals or $250,000 for families.

"When the Democrats came out for $250,000, I must have had 15 people on Long Island say to me, 'I make somewhat above $250,000 and I am not rich,' " Schumer said. "There are large numbers of people who make more than $250,000 who are still middle class."

The Bush tax cuts, passed in 2001, are due to expire by year's end. Schumer's proposal would keep the existing tax rates on the first $1 million of income but put a higher rate on income of more than $1 million.

"I don't think we should give it to people whose income is greater than $1 million," he said. "I'd rather use that for deficit reduction and job creation." -