* Some Democratic support is lukewarm
* But staging vote could be best political option-expert
* Democratic concerns with other major Obama tax hikes too
By Richard Cowan
WASHINGTON, Sept 22 When Senator Charles
Schumer urged quick action to raise taxes on the rich -- people
like billionaire Warren Buffett -- he expected to face
Republican opposition. But the hard-charging senator is also
getting a tepid response from some fellow Democrats.
The "Buffett rule" plan floated by President Barack Obama
to raise taxes on those making more than $1 million a year
might not be getting the traction Schumer had hoped.
Richard Durbin, the No. 2 Democrat in the Senate, said he
has raised "other possibilities" for raising revenues from the
rich in talks with Schumer, his Washington housemate.
Durbin told Reuters that leaders were trying to "measure"
the Buffett rule's interest among Democrats. Speaking of tax
ideas generally, he added, "There are some tax proposals which
have more likelihood of passage" than others.
That muted response highlights the challenge Democrats face
in pushing the controversial idea of tax hikes, be it
increasing rates on the wealthy, cutting their deductions, or
repealing special breaks for the profit-rich oil industry.
Some Democrats, including Durbin, would like their party's
tax hike efforts to cast a wider net. They say if there is to
be a higher tax on the rich to reduce budget deficits or help
pay for Obama's $447 billion job creation plan, it possibly
should be aimed at those individuals making $200,000 a year,
not just those in the $1 million category.
But for some of Schumer's New York constituents, many of
whom have robust salaries but endure a high cost of living, a
$200,000 income is reaching down into the middle class.
A senior Senate Democratic aide said that over the next
couple weeks, Majority Leader Harry Reid hoped to get some
clarity, working with the White House, on exactly which tax
initiatives will be debated this year.
Democrats say they want Obama's jobs bill on the Senate
floor next month, or at least portions of it. If that happens,
tax increases to offset the costs also will be debated.
The aide said that if just "pieces" of Obama's jobs bill
were advanced, something like the Buffett rule might not be
necessary to pay the costs.
For example, he said, "If you just do a payroll tax cut or
the infrastructure bank, you wouldn't need that big of a
pay-for." He was referring to two provisions in Obama's jobs
bill aimed at putting more cash in workers' pockets and helping
to finance domestic construction projects.
To advance the Buffett tax, Schumer would have to draft his
own bill, a potentially time-consuming process after the White
House failed to provide legislative language or many details.
Clint Stretch, a tax specialist at Deloitte Tax LLP, said
it was hard to tell which tax hikes Democrats would line up for
votes this autumn. "It's much easier politically to do the
Buffett principle" aimed at a very narrow band of taxpayers.
Targeted at "the richest of the rich," in Reid's words, the
Buffett rule would capture more revenue from the top
three-tenths of 1 percent of taxpayers. Reid added that 22,000
people in the United States earned a net income of more than $1
million a year, "yet pay less than 15 percent of income in
taxes -- less than many in the middle class."
BUFFETT NOT THE ONLY WORRY
In crafting their message for next year's elections,
Democrats may split over more than just the Buffett rule.
Senator Ben Nelson, a Democrat from the heavily Republican
state of Nebraska, faces a re-election bid next year that could
be important to his party holding its Senate majority.
Talking to reporters this week, Nelson said repeatedly that
spending cuts, not tax increases, should be Washington's focus
as it grapples with annual budget deficits over $1 trillion.
Many House Democrats worry about Obama laying out specific
tax increases that have no prospects in the Republican
Representative Sandy Levin, the senior Democrat in the
House on tax policy, told Reuters on Wednesday, "I have
questions about the 28 percent cap" on itemized deductions that
can be taken by individuals earning more than $200,000. Obama
proposed that tax hike this month to raise $400 billion in
revenues over a decade and pay for most of his jobs plan.
By limiting a broad swath of deductions the rich could
take, including the mortgage interest deduction, Levin fears a
rippling effect that could hit the middle class, an aide said.
(Editing by Peter Cooney)