Speaker of the House proposes tax hike for millionaires
In a recent proposition made by the Speaker of the House, John Boehner, an increase in federal income tax for the wealthiest Americans could be made, but only in exchange for an agreement by President Obama to make a major cut to entitlements.
This proposition would mark the first time that Speaker Boehner has offered a rise in marginal federal income tax rates since the talks regarding the fiscal cliff have begun. The offer proposed suggested a hike in Bush-era federal income tax rates for those who have an annual income of one million dollars or more.
As a part of the proposition Speaker Boehner also is looking to implement a new method, “Chained CPI”, for calculating the benefits of entitlement programs. By using this method the growth of federal health programs, such as Medicare, would slow down, saving billions of dollars over the next ten years.
Although the proposition did make strides in terms of federal income tax increases, there was nothing included to extend the federal unemployment benefits and no mention was made about how sequestration would be addressed.
A deal is not close to be made, but a phone conversation, after a recent face to face session, between President Obama and Speaker Boehner suggested that both parties are making progress in their negotiations.
The offer on federal income tax by Speaker Boehner was a significant move towards the position held by President Obama. Unfortunately the overall proposal still is unacceptable to the Democrats considering the level of revenue, the hit beneficiaries would take from the changes to entitlement programs, and the lack of extension to the federal unemployment benefits.
Categories: Federal Tax, Income Tax, Tax Law Tags: buffet rule, federal income tax, federal tax, fiscal cliff, fiscall cliff, take hike, tax code, tax cuts, tax law, tax pledge, tax reform, tax the rich
New ‘fiscal cliff’ GOP revives failed budget talks
Republicans once again try to revive budget talks with the administration by proposing a $2.2 trillion ‘fiscal cliff’ offer in the House of Representatives. The Republican proposal from House Speaker John Boehner of Ohio counters the $1.6 trillion plan supported by the White House.
The White House had earlier proposed higher federal tax rates for the next decade, higher national debt limits, and possible extension of Social Security payroll tax cuts.
While the White House plan pushes for higher federal tax rates on the wealthy, the Republican version of the ‘fiscal cliff’ plan relies on curbing government and social service spending in order to avoid the ‘fiscal cliff’ and raise federal tax revenues in the next decade.
The ‘fiscal cliff’ is a term used to refer to the combined effects of the expiration of Bush federal tax cuts by the end of December, the beginning of across-the-board spending cuts in January, the beginning of federal taxes related to President Obama’s healthcare policies, and the failure of the Congress and the administration to agree upon a budget deal in 2011.
The new GOP echoes the main ideas from the failed budget talks with the president in 2011. However, Obama and the Democrats are now more bent on imposing higher federal tax rates on the wealthy and less willing to agree on budget cuts on benefit programs such as Medicare after re-election.
With ‘fiscal cliff’ nearing, Boehner and six other House Republicans state that their priority is to find a plan that can be “signed into law in the next couple of weeks.”
Categories: Federal Tax Tags: federal income tax, federal tax, fiscall cliff, income tax, tax cuts, tax law, tax reform