HOW unexpected! It seems we will have a real
negotiation over possible solutions to avoid the fiscal cliff after all.
John Boehner has responded to
the Obama administration's initial proposal with
a counter-offer,
and the White House has not immediately dismissed it. Mr Obama's
proposal raised taxes by $1.6 trillion over ten years, mainly by
allowing the expiration of the Bush tax cuts on income over $200,000 per
year ($250,000 for couples), and cut spending by $600m over ten years,
with most coming from Medicare. Meanwhile, Mr Boehner's proposal would
raise revenues by $800m over ten years by closing loopholes rather than
raising rates, and cut $1.2 trillion in spending. Some $600 billion
would be cut out of Medicare, Medicaid and Obamacare; $300 billion would
come from mandatory spending, and $300 billion from discretionary
spending. Seems like there's room for negotiation there! But of course
the devil's in the details. So, as for Mr Boehner's specific tax
increase proposals...
Under the Republican
offer, tax revenue would rise by $800 billion over 10 years, through
closing loopholes and ending or curtailing deductions and tax credits. Mr. Boehner did not specify on Monday which tax breaks would be curtailed.
Right.
Never mind. Check this space again when Mr Boehner explains how he
expects to get $800 billion in deduction limits over ten years without
creating tax humps, and then makes it clear to the American people that
what he wants is to slash the charitable giving and home-mortgage
interest deductions. That will at least be an interesting political
spectacle
Read the full story here.
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