President Obama Not Budging on Higher Tax Rates For The Wealthy
The clock is ticking.
The Democrats and Republicans have less than a month to work out a deal to avoid the "fiscal cliff".
On one side you have President Obama and the Democrats, who believe that tax increases for the wealthy should be the main ingredient of any deal to avoid the "fiscal cliff". President Obama believes that the Bush tax cuts should expire for people making over $250,000.
On the other side you have the Republicans, many of whom are sticking to a pledge not to increase tax rates. The Republicans believe that entitlement and tax reform is the way forward, and that tax rate increases should be avoided at any cost.
According to President Obama, there will be no deal to avoid the fiscal cliff without some tax increases. As he said in an interview with Bloomberg earlier today, "if we're going to raise revenues that are sufficient to balance with the very tough cuts that we've already made and the further reforms in entitlements that I'm prepared to make, that we're going to have to see the rates on the top 2 percent go up. And we're not going to be able to get a deal without it."
So there you have it - a good old-fashioned stand-off between the Democrats and Republicans.
President Obama and the Democrats are of the mindset that they just won a second term in the White House, and higher tax rates for the wealthiest 2% in the nation was a central plank in Obama's campaign. The Democrats have been emboldened by the election results and they believe that they have a mandate from the nation to pursue higher tax rates for the nation's wealthiest people.
The Republican side, on the other hand, believe that higher tax rates will harm the nation's ability to create new jobs. Many Republican members of the House and Senate have signed the Americans for Tax Reform's "Taxpayer Protection Pledge", which calls for the signers of the document to "oppose any and all efforts to increase the marginal income tax rate for individuals and business." The Republicans also feel that, despite losing the Presidential election last month, their supporters are as energized as ever.
In the end, one of the sides is going to have to budge or else a deal won't get done. Which side will it be?
Filed under: General Knowledge