Daily Tax Update - November 14, 2012: Obama to Propose $1.6 Trillion in Tax Hikes for "Fiscal Cliff" Negotiations

OBAMA TO PROPOSE $1.6 TRILLION IN TAX HIKES FOR “FISCAL CLIFF” NEGOTIATIONS:  Today, in a press conference, President Obama said that he wanted “a big deal” on deficit reduction that might include entitlement changes, tax reform, and discretionary spending cuts. Obama said, “I want a big deal, I want a comprehensive deal, I want to see if we can, at least for the foreseeable future, provide certainty to businesses and the American people, so we can focus on job growth.”  On extending tax cuts for the wealthy, Obama said, “But when it comes to the top 2%, what I'm not going to do is to extend further a tax cut for those who don't need it, which would cost close to $1 trillion.”  On avoiding the fiscal cliff, Obama said, “The first step is for Congress to extend the middle class tax rates for 98% of the country. . . . We then set up a structure whereby we are dealing with tax reform, closing deductions, closing loopholes, simplifying, dealing with entitlements—and I'm ready and willing to make big commitments to make sure that we're locking in the kind of deficit reductions that stabilize our deficit.”  Obama added, “I’m confident we can do it.  It really is arithmetic, it's not calculus.”   Obama said the middle-class tax cut extension could occur as early as next week.  Obama added, “I think that there are loopholes that can be closed, and we should look at how we can make the process of deductions, the filing process easier, simpler, but when it comes to the top 2%, what I'm not going to do is to extend further a tax cut for folks who don't need it which would cost close to $1 trillion, and it's very difficult to see how you make up that trillion dollars if we're serious about deficit reduction just by closing loopholes and deductions. The math tends not to work, and I think it's important to establish a basic principle that was debated extensively during the course of this campaign."

  • President Obama is expected to call on Republicans to accept a plan that calls for $1.6 trillion in new tax revenue over the next ten years.  White House Press Secretary Jay Carney said yesterday that the President is pushing his original budget plan, which includes $1.6 trillion in new revenue, by raising taxes on households making more than $250,000 a year. Carney said, “The president has put forward a very specific plan that will be what he brings to the table when he sits down with congressional leaders.”
  • Today, House Ways and Means Republicans criticized the President’s proposal to raise $1.6 trillion through tax increases on upper-income earners and corporations as part of a deal to avoid the fiscal cliff.  House Ways and Means Chairman Dave Camp said, “After the election, we only had 55 days to steer clear of the fiscal cliff.  The President has now finished at least his third press conference on the matter but is still two days away from meeting with congressional leadership.  After that, he will leave for Southeast Asia, which will bring us to Thanksgiving.  Time is running short, and, frankly, we don’t have time to waste on offers that are going nowhere.  Speaker Boehner, on the very first day after the election, took the responsible approach and offered a compromise that included tax revenues in exchange for entitlement reforms.  Unfortunately, the President has only responded with his same old demand that we raise taxes on nearly 1 million small businesses.  Raising taxes will not create jobs.  Tax reform, however, will not only create jobs but it can produce more revenues – something the President wants.  I urge the President to begin serious and substantive negotiations with Congress.  We are ready.”
  • The President met with union and progressive leaders on Tuesday, with business leaders today, and plans to meet with congressional lawmakers on Friday.

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