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Tax rich Americans to pay for Obama's jobs bill

world Updated: Sep 13, 2011 13:19 IST

US President Barack Obama indicated raising taxes on the rich and on energy firms to fund his $447 billion jobs stimulus bill, asking lawmakers to pass the law without "delays" and "politics", a proposal that immediately drew sharp reactions from the Republicans.

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 $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 9% 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 $200,000, and families earning over $250,000.

"That limitation raises roughly $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 $18 billion.

The proposals include lifting the special preference to oil and gas firms, and treating them like other industries that would collectively, raise $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 $3 billion," Lew said.

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