Signaling new movement in "fiscal
cliff" talks, House Speaker John Boehner has proposed raising the top
rate for earners making more than $1 million, a person familiar with the
negotiations said. President Barack Obama, who wants higher top rates
for households earning more than $250,000, has not accepted the offer,
this person said.
The proposal, however, indicated progress in talks that had appeared
stalled. The person would only discuss the plan on the condition of
anonymity because of the sensitivity of the negotiations.
As part of a broader budget deal, Boehner is still seeking more
spending cuts than Obama has proposed, particularly in mandatory health
care spending. Boehner has asked for a long-term increase in eligibility
age for Medicare and for lower costs-of-living adjustments for Social
Security.
Boehner's tax proposal was first reported by Politico.
A Boehner aide would not comment on the report.
At issue are expiring tax rates that would automatically increase on
Jan. 1 for virtually every income tax payer if Congress and the
president don't act. Steep budget cuts are also scheduled to kick in,
unless Congress and Obama agree to forestall them with other deficit
reduction measures.
Obama has insisted on extending current rates for the 98 percent of
taxpayers in household that earn less than $250,000. He would let the
top two marginal rates increase from 33 percent to 35 percent and from
36 percent to 39.6 percent for those taxpayers making over that
threshold.
Until now, Boehner had maintained his opposition to raising any
rates. Instead, he had proposed to raise up to $800 billion in tax
revenue over 10 years by limiting tax loopholes and deductions as part
of a broad tax overhaul.
But the speaker and House Republicans have come under increasing
pressure form a number of Senate Republicans who say they should yield
to Obama's demand on tax rates and then press him for additional cuts
early next year in exchange for an increase in the nation's borrowing
limit.
Obama has proposed about $600 billion in spending reductions over 10
years, including about $350 billion in Medicare and other health care
savings. But he has also proposed about $200 billion in additional
spending, including aid to the unemployed and to struggling homeowners
and for public works projects.
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