This link details the first of many important discussions on the looming fiscal cliff. Obama and Republican House Speaker John Boehner have recently given their stances on the issue, but this will be the first post-election meeting regarding the "fiscal cliff." Personally, I see Obama in the driver's seat on this one. Though the House remained Republical controlled, I see Obama using his power play and pushing through termination of Bush tax cuts on incomes over $250k. Thoughts?
Here are some tasteful bits:
Mr. Obama, in his first statement on the fiscal cliff since winning re-election Tuesday, said any deal must include tax increases on "the wealthy."
It's clear that there are a lot of special- interest loopholes in the tax code, both corporate and personal. It's also clear that there are all kinds of deductions, some of which make sense; others don't."
Each year, Americans claim more than $1 trillion in tax deductions and bipartisan panels have called for curbs on these breaks
And he wants to impose a special minimum tax on the very high-income—those making more than $1 million a year. The White House also has focused on curbing other tax exemptions, such as those on interest from bonds issued by state and local governments and contributions to retirement plans. The White House has estimated the total package would raise about $584 billion over 10 years.
In recent discussions since his reelection Tuesday night--Both Obama and John Boehner have agreed to hypothetical concessions in coming to a compromise. In a way, this fiscal cliff could almost be looked at in a positive light. Given that the alternative possibility is predicted to almost certainly send us back into a recession--It is a threat that demands bi-partisan work to fight against it.
ReplyDeleteThe speaker of the house has stated that "no new taxes on the wealthy, will be taken". However he is a minority in this house, and therefore his opinions aren't nearly as important as Boehner's (The chair of the Senate, where republicans have actually hold a majority). Obama will have to agree to spending cuts for the middle and lower classes, while Boehner agrees to some elements of sacrifice for the upper echelons. Perhaps a more greater level of taxation on capital gains/dividends-- Both tax loopholes that largely favor these higher income households. Obama will have to put up equally with cuts to spending programs such as the "Child Tax Credit" or the "American Opportunity Act".
What tax expenditures and credits will be altered, remains to be seen. But one thing is for sure--Nothing will be achieved without sacrifice from either side of the aisle. Neither side can stubbornly refuse to give up any concessions. As the fiscal cliff approaches, the time for fighting is replaced for a time for political dancing.