The bulk of the money would come from capping the tax break the wealthy can get from itemized deductions and making it harder for hedge-fund managers to report their income as capital gains and thus pay a lower tax rate on it. Those two changes alone would bring in more than $400 billion over 10 years. The White House also proposed doing away with deductions that favor corporate jets and oil and gas companies, though those changes wouldn’t bring in as much money.
These aren’t new policy ideas. The Obama administration has been looking to cap itemized deductions since the 2009 budget. Nor are they bipartisan policy ideas: a Republican who voted for any of them would be breaking Grover Norquist’s pledge.
The GOP might be working to showcase a more conciliatory tone in public, but that new tone does not mean they’re willing to talk taxes. Michael Steel, spokesman for Speaker John Boehner, e-mailed a quick, and negative, reaction to the White House’s announcement: “This tax increase on job creators is the kind of proposal both parties have opposed in the past. We remain eager to work together on ways to support job growth, but this proposal doesn’t appear to have been offered in that bipartisan spirit.”
But perhaps the point of the proposals isn’t to attract GOP support that, in all likelihood, will never come. Perhaps the point is to force the GOP to make a difficult choice: either come back with offsets the White House can accept in place of these policies, or try to explain why keeping taxes low on the rich is more important than helping the jobless.
All in all, these pay-fors make me less optimistic that much of the jobs package will pass, though my guess is they will make a lot of liberals more optimistic that the White House is finally willing to wage a public campaign on behalf of its policy ideas.