How Obama and Boehner could raise tax revenues

John Boehner (left) and Barack Obama are pictured in this composite image. | M. Scott Mahaskey/POLITICO, AP Photo

Both men want to close loopholes and deductions. | M. Scott Mahaskey/POLITICO, AP Photo

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.”

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