Democrats shift the definition of ‘rich’ in battle over taxes

GOP claims that there is more style than substance to the surtax gained support late Wednesday when Democrats abruptly upped the proposed levy to 5.6 percent from the 5 percent offered earlier in the day. After reporters peppered White House press secretary Jay Carney with questions about the wisdom of imposing the tax in January 2012, when the economy is likely to still be weak, Senate Democrats pushed the implementation date back a year. But that required raising the rate to ensure that the surtax generates enough cash over the next decade to cover the full 10-year cost of the jobs bill.

Still, polls show Democrats may be on to something. In a new Washington Post/ABC News survey, 75 percent of those polled said they support raising taxes on millionaires, including 57 percent of Republicans.

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Sen. Majority Leader Harry Reid on Wednesday called for a five percent surtax on Americans making more than $1 million to pay for President Obama's jobs bill.

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Reality check: Interactive looks at question of who bears the tax burden.

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Wonkbook: Gingrich and Romney have the same problem

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Republicans still hold an advantage on the tax issue, with 49 percent of those surveyed saying they trust Republicans to do a better job of handling taxes, compared with 39 percent who trust Obama — a 12-percentage-point swing toward the GOP since April. But Senate Democrats believe they now have a crisper message to carry to the voters and into debt-reduction talks this fall on Capitol Hill.

“If we can affect the tax debate by drawing this line, we make it easier to get a grand compromise on deficit reduction,” Schumer said, because Republicans’ opposition to tax hikes of any kind “will no longer be the political high ground.”

The White House on Wednesday offered support for the Senate’s surtax plan, which would apply to investment income as well as wages and inherited wealth, pushing the top income tax rate to 40.6 percent in 2013 or to 45.2 percent if the George W. Bush-era tax cuts expire on schedule that year. It would replace a raft of tax hikes offered by the White House, the largest of which would have limited the value of itemized deductions for families earning more than $250,000 a year.

House Democrats, meanwhile, are reassessing their position on who is most deserving of higher taxes.

Rep. Sander M. Levin (Mich.), the senior Democrat on the House Ways and Means Committee, said ending the Bush tax cuts for families earning more than $250,000, as Obama pledged to do during the 2008 campaign, would generate about $39 billion a year. But the vast majority of that money — 79 percent, according to the nonpartisan Joint Committee on Taxation — would come from the 315,000 households that earn more than $1 million a year, the richest 0.2 percent of taxpayers.

Those taxpayers’ incomes have risen sharply over the past three decades, Levin said — far more rapidly than households making closer to $250,000 or $300,000. Those families are well off by national standards, Levin said, but hardly rank among the super-rich.

“There’s a reason to focus in on income over $1 million,” Levin said. In the battle for more revenue, he said, “if you can’t do that, you won’t do anything.”

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