Assured and direct, Obama is refusing to yield to Republicans on a core idea he ran — and won — on: increasing the tax rate for America’s top earners. Though Obama scored a relatively narrow victory on Nov. 6, he can claim a clear mandate in this area.
No one could have missed Obama’s simple message over the last year on the Bush-era tax cuts: Let them expire for just the wealthiest top 2 percent of taxpayers. All who earn below $250,000 would carry on at a lower rate.
Despite that, congressional Republicans led by House Speaker John Boehner are balking. A plan they proposed earlier this week to avoid the Jan. 2 “fiscal cliff” only includes curbing tax deductions. The GOP plan would amount to $800 billion in new tax revenue over 10 years. Letting tax cuts expire for the wealthiest would generate twice that, $1.6 billion.
Failure to strike a deal will result in a tax hike for all and severe spending cuts that could trigger a new recession. Both Obama and the GOP also propose spending cuts as part of any long-term deficit-reduction plan, though there is no agreement on particulars.