Is Obama getting ready to snooker Boehner on taxes?

July 9, 2011

The media accounts of the tax reform deal being cooked up by President Obama and House Speaker Boehner aren’t all that clear. But it is looking like a big tax increase:

– The White House is insisting that as part of any deal the current tax rates on the middle class—the child tax credit, etc.—would be made permanent, while the lower rates on capital gains, dividends and the higher income brackets would expire after 2012. Taken by itself this would be a tax increase pure and simple and violate the GOP’s campaign pledge.

But here’s what we’re told is Mr. Boehner’s political kicker: The proposed deal would also include some kind of “trigger” device, so far undefined, that would compel House and Senate negotiators to complete tax reform discussions over the next several months. We’re told the White House has said it is open in principle to a top rate of 35% on individuals and something like 26% or 27% on corporations—in return for closing various loopholes.

More troubling than these details is the staggered timing. Republicans would be putting their fingerprints on a tax increase in return for spending cuts as a first order of business, which would raise the dividend and top income tax rates to 39.6% (from 35%), or 41% if you include the phase-out of deductions. (Plus the 3.8% payroll tax hike baked into ObamaCare.) Only then would Mr. Obama and the Democrats negotiate the details of tax reform and lower overall rates. (Wall Street Journal editorial)

– With House Speaker John Boehner’s encouragement, President Obama is pushing for congressional leaders to strike a far-reaching agreement to reduce the deficit by more than $4 trillion over 10 to 12 years, which would include more than $1 trillion in new revenues, officials said. (The Hill)

– Boehner would have to agree to revenue boosts through tax-code reform, including closure of loopholes then coupled with lower corporate tax rates, all of which is designed to spur economic growth. The new revenue could reach up to $1 trillion over a ten-year period, funds that could be used for deficit reduction. Boehner and his top aides insist there will be “no tax increases.” (Politico)

– Such a deal could go as high as an eye-popping $3 trillion in overall deficit reduction, but as much as $1 trillion would be in revenues: $700 billion from letting the Bush tax cuts for the highest income brackets expire and another $300 billion from increased revenues, from auctioning off frequencies, increased payments to federal pension plans and ending agriculture subsidies in addition to ending tax breaks such as deductions for corporate jets, yachts and race horses. The deal would come with a pledge, or clawback provision, to revisit comprehensive tax reform in the coming years so as to offset the higher taxes on the wealthy by eventually flattening and broadening the tax base. (Time)

All very confusing, but the best I can make of it is this: higher taxes now in exchange for a promise of tax cuts later to be “paid for” by reducing tax breaks/deductions/loopholes with perhaps some of that money going toward deficit reduction.

I can tell you this: Democrats need a lot more tax revenue to make their long-term budget plans works. This is why Obama has not offered a long-term budget plan. The need for massive tax increases would then be clear to all. In private, liberal economists all talk about a need for a value-added tax to raise the additional revenue.

But a liberal think with close ties to the White House, the Center for American Progress, recently released a budget plan that goes out to 2035. It shows taxes as a share of the economy rising dramatically to nearly 24% of GDP vs. around 18-19 percent historically. And I am guessing they would go even higher if the table went beyond 2035. If Boehner and the Republicans don’t hold the line now on taxes, this is the American future

 

 

11 comments

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Why must the GOP caucus go along with whatever Boehner and Obama concoct in private? Whatever happened to open debate?

Posted by ningrim | Report as abusive

[...] created in June than …No free pass for Medicare recipients in debt talksThe Associated PressIs Obama getting ready to snooker Boehner on taxes?Reuters Blogs (blog)GOP says weak job report means no tax hikesSacramento BeeChicago [...]

ningrim, open debate is very bad. It allows those who actually foot the bill to see themselves being robbed.

Posted by cookboy | Report as abusive

[...] of Republicans who have John Boehner's backAtlanta Journal Constitution (blog)The Hill -Reuters Blogs (blog) -The Virginian-Pilotall 624 news articles » obama – Google [...]

[...] 1) Various news accounts Saturday morning made it sound as if Boehner was flirting with some convoluted deal where some taxes would be raised – including the high-end Bush tax cuts – but lowered later as part of major tax reform, with maybe some of the savings from fewer deduction going to reduce debt. [...]

Foolishness.

The House should pass a stop-gap; Senate Republicans should announce they’ll support the stop-gap passed by the House.

Dare Harry Reid & Obama to stop it.

Posted by BD57 | Report as abusive

[...] 1) Various news accounts Saturday morning finished it sound as if Boehner was flirting with some involved understanding where some taxes would be lifted – including a high-end Bush taxation cuts – though lowered after as partial of vital taxation reform, with maybe some of a assets from fewer reduction going to revoke debt. [...]

[...] conservative columnist James Pethokoukis, apparently before the “deal” blew up: 1) Various news accounts Saturday morning made it sound as if Boehner was flirting with some convoluted deal where some [...]

[...] Embraces Sharia Law That Would Kill Her Don’t try and make sense out of liberal thinking Is Obama getting ready to snooker Boehner on taxes? You know he’s at least planned a snooker Hollywood Left Says It Loves Taxes, But Won’t [...]

As usual you are responding to MSM reports that are complete fabrications meant to split the GOP … Why do you keep trying to kick that ball in Lucy’s hands ?

Posted by dorsaighost | Report as abusive

Let’s check how many deals has Obama reneged on – ALL OF THEM!

How do you negotiate when Obama has no scruples? You don’t!

Any deal is dead before it’s signed.

Key point: “Only then would Mr. Obama and the Democrats negotiate the details of tax reform and lower overall rates”.

Net result: Higher taxes then spend like there is no tomorrow.

Posted by RPUPTON | Report as abusive

No just no, but HELL NO!

Nancy Pelosi, Harry Reid and Barack Obama, starting in 2009, raised spending by nearly 40%, then topped it with the (non)”Stimulus Package” which sent what was left of the economy in a tail spin. After all, the (non)”Stimulus Package” was supposed to keep unemployment down to 8%. In Feb 2009, Mr. Obama promised that if by the 3rd year of his presidency he’s not fixed the economy, he’d be a 1-term president…Let’s hope he gets his wish next year.

If our “political elites” in Washington really want to “fix” the budget, then they need to return to the 2006 budget, and slash that by 30% across the board, everything, defense, Medicare, Medicaide, Social Security…everything, a fire sale,…but they won’t because at heart, they’re all cowards, and corrupt ones at that.

The GOP leadership has “gone along to get along” for decades and aren’t about to change today. What we’re seeing is Kabuki Theatre…for the masses so that we ‘proles” will think something is actually be done…what we’ll really see will be a massive tax hike without any cut in real spending. After all, we were promised $100 billion in spending cuuts last spring…what we got was $350 million…or 0.38% of the budget.

So, while I’m hopin’ for a change, I don’t expect it. We’ll be undergoing what Greece is enduring in less than 5 years at this rate of spending.

Rich Vail
Pikesville, Maryland
The Vail Spot dot Blogspot dot Com

Posted by rvail136 | Report as abusive

Snooker? Obama?
I don’t believe Obama could snooker a blind man playing 3 card Monte! Obama has proven himself to be the most incompetent negotiator we’ve ever seen so it looks unlikely he will “snooker” anyone. The Republicans may roll over but not because of Obama being clever. They’ll have their own reasons for cutting a deal that will prove ineffective, if they do.

Posted by Justafarmer | Report as abusive

[...] or Washington Post hacks (even if the Editorial Board’s output is usually pretty strong), and James Pethokoukis, who openly admitted he was relying on media accounts and thus not his own sources, they assumed [...]

[...] Is Obama getting ready to snooker Boehner on taxes? [...]

[...] sounds like another breathless conspiracy story, Reuters’ James Pouthokoukis blog,”Is Obama getting ready to snooker Boehner on taxes“  is actually just a short summary of where the math leads, if you’re a liberal:  [...]

[...] “But a liberal think with close ties to the White House, the Center for American Progress, recently released a budget plan that goes out to 2035. It shows taxes as a share of the economy rising dramatically to nearly 24% of GDP vs. around 18-19 percent historically. And I am guessing they would go even higher if the table went beyond 2035. If Boehner and the Republicans don’t hold the line now on taxes, this is the American future.” [...]

[...] the rest, including the graphs, here. $(function() { $( "#content-pagination-prev a" ).button({ icons: { primary: [...]

Wouldn’t be a good idea for Boehner to go along with Obama’s plans for gutting the American taxpayer..

Let the U.S. go into default..it might be a good thing if the federal government couldn’t borrow money at the drop of a hat. That appears to be about the only way we can stop D.C. from spending money..

SS, Medicare & Medicade and Education seem to be the biggest drags on our economy..CUT THEM..We’ll survive..

Posted by bitterweed | Report as abusive

[...] or Washington Post hacks (even if the Editorial Board’s output is usually pretty strong), and James Pethokoukis, who openly admitted he was relying on media accounts and thus not his own sources, they assumed [...]

[...] or Washington Post hacks (even if the Editorial Board’s output is usually pretty strong), and James Pethokoukis, who openly admitted he was relying on media accounts and thus not his own sources, they assumed [...]

[...] Americans Rule Out Paying More TaxesU.S. News & World Report (blog)The New American -Reuters Blogs (blog) -Roll Call (subscription)all 6,272 news [...]

President Obama has bent over backwards trying to meet these guys. He inherited a long term structual debt problem. Remember two tax cuts unpaid for, by far the biggest we have incurred. Two wars not paid for, and a medicare prescription that also was not paid for. Suddenly, when Obama comes into office, we have a deficit problem, Why did’nt Boehner, Cantor, Ryan and company not cry then. I know, thay were too busy deregulating and allowing wall street to run amok.Remember, Obama came into office inheriting the worst economy in decades.The recovery act worked, it accomplished what it was supposed to do. One third tax cuts, one third went to the states, and the last third went to stimulus, not nearly enough.

Posted by kemetic | Report as abusive

President Obama has bent over backwards trying to meet these guys. He inherited a long term structual debt problem. Remember two tax cuts unpaid for, by far the biggest we have incurred. Two wars not paid for, and a medicare prescription that also was not paid for. Suddenly, when Obama comes into office, we have a deficit problem, Why did’nt Boehner, Cantor, Ryan and company not cry then. I know, thay were too busy deregulating and allowing wall street to run amok.Remember, Obama came into office inheriting the worst economy in decades.The recovery act worked, it accomplished what it was supposed to do. One third tax cuts, one third went to the states, and the last third went to stimulus, not nearly enough.

Posted by kemetic | Report as abusive

Of course America needs tax increases: it’s mixed up in two wars, and has spent eight years borrowing from the Chinese to finance the Republicans’ payoffs to Big Pharma and tax cuts for the rich.

These guys seem to be able to calculate a golf score. Surely that’s enough math to handle that much budgeting.

Posted by DavidLJ | Report as abusive