Republicans’ Newest Pitch On Taxes — And Why Obama Can’t Accept It
Obama’s plan to let the high-income Bush tax cuts expire nets him a bit less than $1 trillion over 10 years. But he ultimately wants tax revenues to increase by about $1.6 trillion, by limiting tax expenditures on the same group of top earners. Trying to net the entire $1.6 trillion on the expenditure side of the tax code would almost certainly require raising taxes on middle income earners, according to the Tax Policy Center.
In January, TPC analyzed (PDF) the revenue and distributional effects of three plans to limit tax expenditures. Each would raise over $2 trillion over 10 years. But each would also require millions of middle class taxpayers to pay higher taxes — something Obama’s pledged not to do.
That strongly suggests Obama won’t be able to beg off his pledge to at least slightly increase marginal rates on high income earners. But keeping those rates low is perhaps the right’s highest priority. ...."