How Obama and Boehner could raise tax revenues
It may sound like President Barack Obama and Speaker John Boehner are saying different things on taxes.
Obama said Friday he wants the “wealthiest Americans to pay a little more in taxes.” Boehner insisted Friday that tax rates won’t go up on anyone. In reality, they are both leaving the door open to making the wealthy pay more taxes.
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Which is why, somewhere embedded in their competing statements, may be the path to a deal.
Consider this: Both men want to close the loopholes and deductions that clutter the Tax Code – a process that would raise revenue. Boehner said Friday he is opposed to raising tax rates, and Obama didn’t once mention rates.
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There’s a win for both men in eliminating tax loopholes and deductions: Obama can say the wealthy are paying more, and Boehner can say he didn’t raise tax rates. At the same time, the government gets more revenue.
It would be a reversal, of sorts, for both men. House Republican leadership – most notably Majority Leader Eric Cantor (R-Va.) – insisted in 2011 that if Congress were to close loopholes, that would have to be offset by tax cuts. Some key Republicans say they have given up on that. Cantor’s spokesman Doug Heye did not respond to an email seeking comment on Cantor’s position on loophole closures.
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And Obama said he wants tax rates to snap back up to where they were during Bill Clinton’s administration. This latest negotiating maneuver might not allow that.
Capitol Hill aides late Friday said they were seeking a framework like this.
There are a lot of caveats that could blow up something resembling this. Jay Carney, Obama’s chief spokesman, repeatedly said the president would veto any legislation that extends tax cuts for the wealthy – but he demurred when asked if that would hold if Obama got additional revenue.
Senate Democrats are hooked on extending tax cuts for Americans earning less than $250,000 – anything less could seem like capitulation to them.
House Republicans, who haven’t yet returned to D.C. since the election, were trained by their leadership to say on repeat that spending was at the root of the nation’s fiscal problems, not a lack of revenue.
It will all come to roost in the next few weeks.
Obama has invited congressional leaders from both parties to the White House next week, the president said in his first statement since election night, where he’ll begin talks over how to resolve the impasse over taxes and spending cuts. He’ll start with an open mind, he said.
“I’m open to compromise. I’m open to new ideas. I’m committed to solving our fiscal challenges, but I refuse to accept any approach that isn’t balanced,” Obama said in the East Room, joined by Vice President Joe Biden.
Though the president stayed away from making a declaration on tax rates, he clear in arguing that the election’s results have granted him the upper hand in negotiations.
“We found out that the majority of Americans agree with my approach,” he said as he called on congressional Republicans to extend the Bush-era tax cuts only for individuals making less than $200,000 and families making less than $250,000, and to let the upper-income tax rates expire, while negotiating a broader deficit reduction package.
Earlier Friday, Boehner tried to shift responsibility for the looming fiscal cliff to Obama, saying expiring tax rates and trillions of dollars in spending cuts are mostly his to solve.
“This is an opportunity for the president to lead,” Boehner said in the Capitol. “This is his moment to engage the Congress and work toward a solution that can pass both chambers.”
Readers' Comments (396)
I hope Obama chooses to let us go off the cliff.
Obama? Lead? That would be a switch!
In every speech and every debate Obama said his plan included reverting the tax rates back to how it was during Clinton years for the rich. People heard that and they said OK when they re-elected him. 80% of Americans have no problem in raising the taxes for the rich. If GOP doesn't stop being the party of the rich and party of NO, they will become decimated in 2014 elections.
Obama? Lead? That would be a switch..
It's funny, for Boehner, he really has the role of the President - the WH should put proposals on Boehner's table so he could veto it or not. And it seems clear that what he'll accept is the kind of proposals Romney would have come up with. But the US elected Obama for President!
Grand scheme, austerity is going to have more far reaching impact on growth than tax hikes. For every entrepreneur or investor that is dissuaded by the higher tax rates, that's an opportunity for an entrepreneur or investor that isn't. For all the threats of layoffs and pulling a Galt, competitors will happily gobble up market share. Free market at work. In a nutshell, the GOP economic ideology is flawed.
Go over the cliff, Obama, then see if Boehner wants to block targeted tax cuts for the middle class next year (although I would prefer ALL bush tax cuts expire). Boehner doesn't have a leg to stand on.
Whoa Politico. Check the facts. $! Trillion just by raising taxes on the $250k +. Not so my friends.CBO estimates it would be approximately $42B per year or $420B over ten years. Let's don't tip the scales here
People must still be confused, thinking that Obama wanted to be President because of the leadership role. It's clear to me that he wanted reelection because his ego would never recover from a Carter-like defeat and now he can live out four more years of pampering and diffidence at the taxpayers' expense.
The office is much bigger than this man - the majority of you just haven't figured it out yet.
It is pretty obvious that President Obama will let the GOP know that States representing 331 EV rejected Romney's magic plan of raising revenue without raising taxes on the rich...331 to 206 matters...
This is not 2 years ago when extending unemployment was necessary for Americans and our economy.
Republicans are pretending they did not lose the big one...counting Saunders and King and the new Democratic Senators the Dems hold 55-45 in the Senate...
Not having to be a candidate again and with a major EV mandate...Obama can lay it out to the American people...
While Tea Party mutters Benghazi..
Well, Mr. Speaker, have I got a deal for you: tax cuts for 98% of taxpayers! Unfortunately, we're busy for the rest of the year (transition work between the first and second terms, you know), but on January 1 we'll be happy to sit down and talk about lowering the rates that most Americans are paying on that date. Then, if you want to get creative, we can talk about making the tax code more efficient and trimming loopholes to offset those tax cuts - say, by ending the preferential treatment of capital gains. Because we all know that a simpler tax code means greater growth, right?
Your move, Mr. Speaker.
Today Speaker Boehner simply repeated everything that Mitt Romney and The Tea Party said about taxes during the campaign, and that the American people just rejected.
He is saying that the Tea Party faction will not compromise.
He is saying that the Tea Party faction is telling the American people to eff off.
John Boehner is the Tea Party faction’s mouth. Nothing more.
He dances for them.
He is their beyatch.
Speaker Boehner made that very clear today.
Boehner had better get his right wing nuts under control or there will be no compromise and we, the American people, will lose again to right wing extremists.
CanadaJohn #9> It's clear to me that he wanted reelection because his ego. Maybe that's why your team lost. And just because Obama is not leading in the direction you want to go doesn't mean he is not leading. Grow up and learn to live in a democracy.
....there will be no compromise and we, the American people will lose again to the right wing extremists.
And they will blame it all on Obama and the Democrats.
I call it treason.
The premise is false. Tax rates have no effect on GDP growth or jobs. No correlation whatsoever.
The GOP should let Obama and Dems do what the want with Tax Policy, regardless of how they or others feel. This way we can let the cards fall as the may, and if things go great - awesome.... if not they will not be able to blame the GOP of being obstructionist. Then in two years the country can vote for House and Senate Seats accordingly.
One thing I will add though for all who say should just go to the rates under Clinton because things were so great then.... there is, could and most like a VERY big difference. We are in a differnent time. There is no Tech Bubble inflating our investments, confidence, values of everyting etc. As a country there was a mindset of the "new economy" and the growth would never end, etc. Under those circumstances, yes higher tax rates are easily more palatable. Especially when you think and feel 20%+ market rates of returns will go on forever, and your house will be worth a billion dollars when you retire.
Again, let the Obama and the Dems have their tax policy and lets see the results. Otherwise come mid term elections they will just campaign again on the blame game. Let the cards fall where they may, take away that arguement and go from there.
Dear Santa Claus, Go for it - We got trillions left to go! And we got lots of campaign contributors to pay off! We have to provide the payolam, payoffs and Patronage - it is only fair!
The idea of lower taxes for the upper class and the results being a "trickle down" did not work for Ronald Reagan, George H. W. Bush had to raise taxes in spite of "read my lips" and George W Bush looks stupid describing this all to foolish "feed the Beast" concept of favors for the rich and it will create new jobs more of the same B.S the Republicans have been spouting for years
Just more of the same old blather we got before the election. We went to bed Tuesday night with one government, both sides hoping for change, and woke up Wednesday morning with the same old government we had before. Obama won, Boehner won, Reid won...we lost.
One bright spot: an Independent was elected to the Senate from Maine. We need more of that to bring about credible change in our Nation's politics. Senate rules will require him to declare which "side" he will play nice with, but as more and more independent and third party candidates are elected those rules can be changed. Maybe then we can finally break the stranglehold the two-party monopoly has on our government. Maybe then we can restore confidence in our public servants and not continue to feel disdain for our politicians.
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