Obama Won’t Budge on Top Tax Rates

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U.S. President Barack Obama with Delaware Gov. Jack Markell in the Roosevelt Room at the White House on Dec. 4, 2012. President Obama met with members of the U.S. Governors Association Executive Committee to discuss the "fiscal cliff".

Barack Obama dug in Tuesday on his demand that any bargain to avert the so-called fiscal cliff include an agreement to raise taxes on the wealthiest Americans, warning that a deal would not be reached before the Jan. 1 deadline unless Republicans dropped their opposition to the rate hike.

In his first interview since winning re-election last month, Obama said he was prepared to make painful unspecified cuts to government spending and social programs in order to rein in the deficit. But in order to forge a pact to sidestep austerity in the new year, Obama said, Republicans would have to accede to his demand that tax rates on the wealthiest 2% of Americans rise.

“The issue right now that’s relevant is the acknowledgment that 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,” Obama told Bloomberg Television’s Juliana Goldman. “And we’re not going to be able to get a deal without it.” The President has already vowed to veto a deal that doesn’t include such a provision.

With less than a month before the U.S. faces a self-inflicted combination of sharp spending cuts and the expiration of Bush-era tax cuts, negotiators have adopted a bearish public tone about the prospects for a deal. The haggling has gone “nowhere,” House Speaker John Boehner groused on Sunday. Both Boehner and the President have put forth opening bids, with Obama asking for $1.6 trillion in tax increases over the next decade in a deal that precludes Medicare and Social Security cuts to beneficiaries and the House Speaker proposing to cut $600 billion from federal health programs over 10 years while raising $800 billion in revenue by limiting deductions and closing loopholes in the tax code. As expected, these offers were swiftly rejected by the opposing side. They are public markers that reflect the two parties’ long-established priorities.

Obama said Tuesday that Boehner’s offer was “out of balance.” He couched his objection not in ideological terms, but actuarial ones. “It’s not me being stubborn. It’s not me being partisan. It’s just a matter of math,” he said. “What I’m going to need, what the country needs, what the business community needs to get to where we need to be is the acknowledgement that folks like me can afford to pay a little higher rate.”

Obama argued that raising revenue exclusively through closing tax loopholes would not yield sufficient savings. “When you look at how much revenue you can actually raise by closing loopholes and deductions, it’s probably in the range of $300 billion to $400 billion,” Obama said. “That’s not enough to come up with a balanced plan that actually reduces the deficit and puts us on the path of long-term stability.”

Many of the loopholes and deductions Republicans would need to target to achieve a higher level of revenue are important ones, he said, including charitable deductions that many institutions rely on to preserve giving. “If you eliminated charitable deductions, that means every hospital and university and not-for-profit agency across the country would suddenly find themselves on the verge of collapse. So that’s not a realistic option.”

While Obama’s stance on taxes was insistent, he stressed that he was open to compromise in other areas, recognizing that “I’m not going to get 100%” of what Democrats want. The President can afford his tough line on taxes, however, because his position on the expiration of the George W. Bush-era tax cuts is strong. Without a deal, rates on all Americans would rise next year. A majority of Americans agree with Obama’s contention that the top tax bracket can afford to fork over more, an idea on which he campaigned extensively. (Notably, Obama suggested he would be open to lowering rates somewhat in 2013 if other elements of a deal were agreeable.) Acknowledging Obama holds an advantage on the issue, Republican Congressman Tom Cole of Oklahoma, a staunch conservative, argued last week that the GOP should capitulate on taxes for the wealthy in an effort to avert the cliff and avoid dealing the economy a blow that could thrust it back into a recession — and avoid the political blowback that would accompany it.

Despite the despairing tone of some of the negotiators’ public pronouncements, the contours of a deal are beginning to take shape, with revenues and federal spending cuts likely to fall somewhere between the markers laid by Obama and Boehner. In the Bloomberg interview, Obama indicated a deal to reduce the nation’s long-term deficits would be a two-phase effort, with an initial pact to resolve the immediate crisis before Jan. 1, under which tax rates for the wealthy would increase.

Then next year negotiators would get down to the tricky business of cutting deals on entitlement and tax reform that would achieve a total of some $4 trillion in savings over the next decade. “When you look at what Ronald Reagan did, back in 1986, working with Bill Bradley and others, that was a year-and-a-half process,” Obama said. “So what I’ve suggested is, let’s essentially put a down payment. On taxes, let’s let tax rates on the upper-income folks go up.” For the President, a deal begins with that stipulation. Without it, he says he won’t budge.

165 comments
womenspk
womenspk

I just read that Boehner said yesterday the White House has "wasted" another week on fiscal negotiations.  NO.  Standing up for the American citizen is NEVER a waste of time.   It's no secret who implemented and has benefited the most from the many trade laws and tax changes.  Remember the industrial revolution?  Industry is almost nowhere to be found in this country, thanks to the GOP. 

 Remember, this is the party that vowed to do whatever necessary to get Obama removed from the White House this year.  Hey Boehner and friends-we all see how THAT worked out for the GOP.  Wasting time is wasting the taxpayer's money. Keep doing that and you'll be fired.  Regardless of party affiliation, Americans are sick of politicians who don't do their job.

Quit acting on behalf of those lobbyists and special interest groups, aka CEO's.  Keep doing that and you'll be fired.  Their money couldn't buy the voter or suppress the right to vote. Oh yeah, we're on to all of that.  We vote you in. We'll vote you out.

Amazing you've already forgotten November 6th.   We figured that would happen. 

SamuelYap
SamuelYap

The GOP's outright refusal to raise taxes on the rich is not unsound economics, it is also unfair and unjust to the middle class. The tax increase for the 2% would hardly make a dent on their deep pockets, and so would not change their economic activities one little bit. But even if it did, it is just unfair and unjust to tax the middle and lower income classes more in terms of percentage to income, than the rich. The question is not economics, but equity. If you build an economy based on unfairness and favoring the rich vis-a-vis the middle and lower income earners, that structure is unjust, and deserves to be dismantled. The GOP has contrived reasons for opposing this, but the bottomline is they just want to show that their pee is higher than the Dems.

vstillwell
vstillwell

You know, the states that rely on federal money for their survival are in the South and the Midwest. Just turn off the tap. Let the thing go belly up. If they don't want to participate in the healthcare act, fine. Let 'em go on their own. The best lessons learned are the hard ones. 

oldwhiteguy
oldwhiteguy

Personally, I don't care how long it takes.  The Republicans are gong to have to come to terms with reality.  Those rates on those folks need to go up.  There are bills to pay and frankly, it was the Republicans who spent like drunken sailors and ran up the tab. In our history, we've had much higher corporate taxes and much higher personal taxes and everything worked just peachy.  So I don't care if any given Republican Representative's constituents come to rallies wearing tin foil underpants and American flag leggings with "Obama is a Socialist" t-shirts.  And I don't care if they got all their money from the system-gamers named Koch and Adelson and Bain.  It's time for these bar stool Patriots to lift the donkey's tail and face the situation.

schroeder.cary
schroeder.cary

Another example of Republicans only care about the rich and just pretend to care about the middle class so they can get enough votes to win elections.  A lot of them don't care about far right christian beliefs or guns but say they do just for more votes.

chaseng
chaseng

Kill two birds at once. Tax (Oops!, call it a "Users Fee") fuel-borne carbon and use the reveue for deficit reduction.

sverry7
sverry7

One has to hope that this game of political brinksmanship will end with a deal. If the U.S. did go off the cliff, the resulting recession would be only the beginning of the damage. Recall how the last episode of this game cost a Moody's downgrade. This time around, they will not be the only ones making their moves. The spectacle of the world's number one economy succumbing to this kind of Disney World politics will irrepairably damage America's international image and only foster the impression that as a superpower its day is done. Connect the dots, folks. How would such an event affect stability in the Mid East, for starters? The popular impression among America's enemies would be that soon Uncle Sam would not be able to pay the bills for its military machine. There is much more at stake here than meets the eye. 

fitty_three
fitty_three

Looks like the GOP poop tide is receding.  The moon must have gone down.

kenkatzen
kenkatzen

I support the falling off of the "Fiscal Cliff" because then the President, Senate and House of Representatives will finally have no choice but to go to work after years of not doing their jobs. That goes for ALL of them. This 3rd grade finger pointing crap has to go.

If President Obama was smart he would do the C-SPAN transparency he promised in his first campaign. That would  hold them ALL ACCOUNTABLE. 

That way the American citizens could actually see:

1. What is proposed in taxes

2. What is proposed in cuts

3. What they are going to handle the debt ceiling

4. EXACTLY who said what and when! 

5. ACCOUNTABILITY is what needs to be instituted 

ChrisKellawan
ChrisKellawan

Obama shouldn't budge, if the repubs are that stupid they'll pay during the midterm elections. I'm all for less of these teabilly idiots.

richard.draucker
richard.draucker

Obama isn't interested in resolving the deficit or raising more tax dollars.  Even if he raises the top tax bracket to 80%, Mitt Romney is still going to be paying 14% because he has sufficient deductions to do that.  Higher rates won't raise any additional revenue for the budget because the rich don't pay those rates anyway.

The best solution is to leave rates where they are and cap deductions at a level that raises 1/3 the money needed.  Then focus on cutting Entitlements and the Military to raise the other two thirds. 

Marky_D_Sodd
Marky_D_Sodd

@vstillwell Your "reasoning" is identical to that used by the states who seceded from the Union a century and a half ago.  It didn't work then.  It wouldn't work now.

MrObvious
MrObvious

@DonQuixotic 

What, a crap book made movie (like the Ayn Rand movie) that only die hard righties watched and sucked up like nutty cool aid is not considered 'documentary' of the year?

jsfox
jsfox

@DonQuixotic well he was warned. When making a film based on paranoid delusions you really need outstanding special effects and CGI.

fitty_three
fitty_three

@DonQuixotic  

When propaganda films start making the Oscars, then we can concern ourselves with the state of our country. Of course, that's setting aside any consideration about Citizens' United, which probably allowed superpacs to put money into it.

Ardeng
Ardeng

@oldwhiteguy The Dems controlled the House from 2007-2010, and have controlled the Senate since 2007.  Obama has spent more money that Presidents 1-43 combined.   How is it that the Republicans spent like drunken sailors when the Dems controlled congress...who appropriate spending?

chaseng
chaseng

Better yet, use the revenue from this "Users Fee" to build nukes. While we quibble about building one nuke, the Chinese are building ten! (10) each year into the forseeable future. 

jsfox
jsfox

@sverry7 Well the first thing you are doing here is assuming there is a cliff as opposed to  gentle roll down a hill that could be stopped even a few months after January without ill effect. 

And Obama merely has to ignore the Congress and go ahead and instruct Treasury to pay the bills without the debt ceiling increase, thus avoiding another downgrade. 

fitty_three
fitty_three

By that I mean that we probably can't get the more moderate GOP congresspeople to go along.

fitty_three
fitty_three

@La_Randy  

I actually like it better, because it will balance the budget in less time.

Politically though, it's not possible at this point.

jsfox
jsfox

@kenkatzen It is sad when a person goes on a rant only to find out everything he wants done has be done and is available to read at anytime. At least from the President. Now the Republicans I cannot help.

So here you go: http://www.whitehouse.gov/omb/budget

fitty_three
fitty_three

@kenkatzen  

Sounds like you're neutrally in favor of the GOP.

Go ahead, let's run off that fixcal cliff.  The GOP's going to get a black eye over this.  Those Lame Duck Teabaggers are going to put the GOP in the unenviable position of having to take the blame for this.

So if you're going to say Obama isn't being accountable, then tell me:

How is Obama going to make the Teabaggers go along?

jsfox
jsfox

@richard.draucker Actually you are wrong, but you knew that  didn't you. Capping deduction and closing loop holes are illusory when it comes to increasing revenue. As was clearly pointed out when Romney tried to tout this approach.

MrObvious
MrObvious

@richard.draucker 

It's amazing how during Clinton the higher taxes paid down the deficit but now it won't do squat and the only thing we can do is to shrink government even more. But not by shrinking the stuff that is causing the deficit. But shrinking the stuff that never was the problem.

fitty_three
fitty_three

@richard.draucker  

Nice formula for sticking the middle class.  

Pay your freight instead of trying to cook up more backdoor schemes to skate on your fair share.

vstillwell
vstillwell

@Marky_D_Sodd @vstillwell Well, Alabama, Kentucky, Tennessee, Mississippi, Louisiana, Nebraska, Kansas, Oklahoma, the Dakotas are all under-performing states. Their schools don't meet the standard, they have relatively low incomes and they have the highest poverty rates. Plus, they're all low population states as well. Just saying. 

womenspk
womenspk

@Ardeng @oldwhiteguy  

Actually, Obama spent less his first term in office than any other president since the 1950's. I say that because there is FACT to support it. Your info has proof WHERE?  The Republicans have the most amazing selective amnesia I've ever encountered. BUT, history can't be rewritten to suit one person more than another. 

It's also a fact that Republicans start wars and consistently put this country in the red. Democrats improve the budget and bring our troops home. Once again, do some research and you'll find this is the truth.

jsfox
jsfox

@Ardeng @oldwhiteguy Obama has not spent more money. Go run the numbers. And don't forget to subtract the spending Obama has no control over and the lost revenue from the recession. The right is so fiscally clueless it is almost laughable if it wasn't so damn sad.

DonQuixotic
DonQuixotic

@Ardeng @oldwhiteguy 

False.  The Democrats did not (and do not) have the majority to make them filibuster proof.  This is why we've seen historic levels of Republican filibuster threats over the past four years.

sverry7
sverry7

Well, look at it this way. If a general were facing an invading force the size and strength of which he had no verifiable intel on, what should he do? Post a garrison on the border or put the whole military on high alert?

MrObvious
MrObvious

@jsfox @sverry7 

The ill effect will probably be a stock market tank used to the fickle nature of some investors to make everything into 'the sky is falling' until it rebounds shortly thereafter.

But you're right in that the full effect won't be there until after 6-8 months and there's definitely time to get the right deal done.

outsider
outsider

@53_3 

They're too scared of the TPers. 

Read this article this morning:

Not many people know this but “The Simpson-Bowles Plan” is magic. It is whatever you want it to be. It will fix the deficit and grow the economy and it does it without raising taxes on anyone, unless you want to raise taxes on some people, and then it does that. It cuts all government spending but in a way that doesn’t hurt Medicare or The Troops. If you stand in front of a mirror and say “Simpson-Bowles” three times David Gergen and Gloria Borger appear out of nowhere and praise your wisdom and seriousness. “The Simpson-Bowles Plan” gives you Your Country Back and makes it the ’90s again, or the ’50s, or whatever past decade you wish it was, when things were better. Simpson and Bowles were two kindly wizards and they granted America three wishes but dumb Washington, D.C., is too Partisan to make the wishes. Obama and the Republicans need to Grow Up and Get Serious and Pass “The Simpson-Bowles Plan,” everyone in America agrees.

That is basically the way the press and most of Washington talk about the deficit, the “fiscal cliff” and the deficit reduction “framework” endorsed by two old white guys named Simpson and Bowles. No one actually knows or cares what’s in the actual Simpson-Bowles plan, but at this point it doesn’t actually matter. Here’s Fred Barnes counseling Republicans to endorse Simpson-Bowles despite the fact that it includes the expiration of all Bush tax cuts, a thing he does not support. Here’s reasonable old David Gergen warning that Democrats are overreaching by asking for more than $1 trillion in new revenue, and invoking Simpson-Bowles yet again as an example of the Proper Way to do a Grand Bargain. Simpson-Bowles includes more than $2 trillion in new revenue.

http://www.salon.com/2012/12/05/simpson_bowles_is_magic/

kenkatzen
kenkatzen

@53_3 @kenkatzen I am in favor of  hearing what they really say on both sides. I am tired of ALL of them saying one thing privately then doing their phony press conferences.

President Obama needs to compromise with the Teabaggers and any other representative that disagrees with his proposal like every other president has had to do since George Washington. 

TalmageC.Brown
TalmageC.Brown

@MrObvious  Let's take this line of reasoning a little farther.  The middle class also paid more during Clinton.  If Clinton tax rates are the model solution, then why shouldn't they apply to the middle class as well?

TalmageC.Brown
TalmageC.Brown

@53_3  It's so noble for you to decide that someone else should pay a higher percentage of their income to the government than you do.  To me, fairness is when everyone pays the same rate.

DonQuixotic
DonQuixotic

@Ardeng @oldwhiteguy 

Also, when oldwhiteguy mentions that the Republicans "spent like drunken sailors and ran up the tab", he's of course talking about 2001-2006 when the had a majority in the House, Senate, and Bush was in office.  This is when we saw the budget and the debt/deficit explode.

jsfox
jsfox

@MrObvious @jsfox @sverry7 I am not even convinced the stock market will behave adversely. So far as we approach the "cliff" there has been a collective yawn from The Street.

TyPollard
TyPollard

@kenkatzen @53_3 

Should they also compromise with the Progressive  Democtratic Caucus?

* I wish

How will this work exactly?

Seems like Obama already smack dab in the middle.

fitty_three
fitty_three

@kenkatzen

No, because they don't want to compromise.  They've brought us to the brink of disaster twice and each time Obama caved in.

President Obama is not the problem.  If the Teabaggers want to hold the country hostage for a 3% increase on the highest incomes, then so be it.

bobell
bobell

@TalmageC.Brown You don't like the taxes on Schedule C?  Incorporate.

Next question.

MrObvious
MrObvious

@TalmageC.Brown @MrObvious 

Incidentally Dems and Obama have done more for small businesses then GOP - or at least tried through the many filibusters. Let me put it like this; as a liberal I want to reward small and medium businesses for expanding. If that's done through favorable taxes then so be it.

Also - most small businesses fall under the under 250k tax rate. Lets not pretend that most of them pay the fraction more over 250k.

Making shit up about this situation won't change the dynamics.

TalmageC.Brown
TalmageC.Brown

@MrObvious  When Schedule C businesses are taxed at higher rates, you really think that has no impact on employment?

MrObvious
MrObvious

@TalmageC.Brown @MrObvious 

I agree. But here's the issue - we know that since 2000 average Middle Class income have remained flat. Which means despite tax cuts there's just not that much spending power. And for everything we laud the 'job creators' with they're not really job creators at all. They're demand fulfillers. The real job creators are the ones spending money forcing someone to fulfill that spending demand.

Ask yourself what will hurt the economy more - having people with all the resources pay more in taxes or the people who increase demand through spending?

It's really not that hard.

fitty_three
fitty_three

@TalmageC.Brown

Because we don't have as much money and we are already paying a high price for the recession?

Because we are the the primary targets of the cuts you propose?

 Might I venture that you can't see the real world from the comfort of your silk couch?

fitty_three
fitty_three

@TalmageC.Brown

I think the key here is a simple one:

"Disposable Income"

 For high income Americans, disposable income makes up the bulk of their earnings.  You don't have to pay much, as a percent of your income for essentials.

For lower incomes,  disposable income is small to non-existant and increasing the tax burden on us will directly impact our quality of life.  We already pay our fair share.

You will still be rich after paying 3% more.

fitty_three
fitty_three

@TalmageC.Brown

Convenient for you, but I think a progressive tax rate is the way to go.

You have more, you pay more.  Besides, your social footprint is far larger and we should not have to shoulder the burden for your privileges.