Tax rich Americans to pay for Obama's jobs bill

Obama sent to the US Congress, the jobs bill that he intends to pay for by ending tax incentives for oil and gas firms and individuals earning over USD 200,000, setting in the process a fresh showdown with the Republicans, who are strictly opposed to the raising of taxes.

The President though warned the Republicans not to play "games" to obstruct the passage of his bill, which he said was needed in the moment of national crisis, as the country struggles with a nine per cent unemployment rate.

"This is a bill that will put people back to work all across the country. This is the bill that will help our economy in a moment of national crisis. This is a bill that is based on ideas from both Democrats and Republicans," he said.

"And this is the bill that Congress needs to pass. No games. No politics. No delays. I'm sending this bill to Congress today, and they ought to pass it immediately," Obama said in his speech after forwarding the bill.

His budget director Jack Lew said the bill is paid for and there is a limit on itemised deductions and certain exemptions for individuals who earn over USD 200,000, and families earning over USD 250,000.

"That limitation raises roughly USD 400 billion over 10 years," he told reporters at a White House news conference.

He also highlighted a provision that would treat interest earned by investment fund managers as ordinary income, rather than taxing it at the capital gains rate, a proposal that would raise another USD 18 billion.

The proposals include lifting the special preference to oil and gas firms, and treating them like other industries that would collectively, raise USD 40 billion.

"And finally, the corporate jet depreciation rule is changed. Right now corporate jets are depreciated over five years; commercial over seven. It would treat commercial and corporate jets the same, at five years. That raises USD 3 billion," Lew said.

The proposal drew sharp criticisms from the opposition, with Republicans saying the proposal does not meet bipartisan spirit.

"It would be fair to say 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," said Michael Steel, chief spokesman for House Speaker John A Boehner.

House Majority Leader Eric Cantor said: "I sure hope that the president is not suggesting that we pay for his proposals with a massive tax increase at the end of 2012 on job creators that we're actually counting on to reduce unemployment".

House Republican Policy Committee Chairman Tom Price, said Obama's remarks today and last week indicate that the legislation is going to be eerily similar to the failed stimulus policies of last Congress.

"Two years ago, President Obama requested that a then-Democrat Congress join him in spending a trillion dollars in order to keep unemployment below eight per cent," he said.