Vice President Biden and Senate Minority Leader Mitch McConnell were close to a deal Monday to cancel historic tax hikes for most Americans. But they were still hung up on spending, with Democrats resisting a Republican proposal to delay automatic spending cuts for just three months.
As President Obama prepared to deliver remarks about the “fiscal cliff” at 1:30 p.m. at the White House, negotiators for the administration and McConnell (R-Ky.) appeared to have nailed down many of the most critical tax issues, including a plan to let taxes rise on income over $450,000 a year for couples and $400,000 a year for individuals, according to people in both parties familiar with the talks.
The “fiscal cliff” situation is still looking pretty grim, but Democrats and Republicans continue to insist that they’re making headway in their continued negotiations on Monday. While we’re certainly hopeful that the two sides can come together in agreement to prevent tax hikes for 90 percent of Americans, it’s hard to have much faith when they’ve got less than twelve hours to reach a compromise that has eluded them for months.
We guess now would be as good a time as any for everyone to start crossing their fingers…
One of the touted benefits of “Plan B” is that it only raises taxes for those making $1 million or more. As Eric Cantor said this morning, the plan would raise revenue “without hurting many small businesses” or taxpayers.
But a closer look at the tax impacts of Plan B shows that while it raises taxes on most million-plus earners, it also raises takes for many low-income earners.
According to the Tax Policy Center, the tax code adjustments contained in Speaker Boehner’s ‘Plan B’ proposal would only bestow a tax cut on those making between $200,000 and $500,000 annually. Worse, approximately 20 percent of those making $20,000 or less will see their taxes increase by $1,070 - an increase of at least five percent for each taxpayer.
The governor has consistently described the mandate as a penalty…[President Obama] insisted publicly and to the members of Congress that the mandate was not a tax. After it passed the Congress, he sent his solicitor general up to court to argue that it was a tax. Now he is back to arguing that it’s not a tax.Romney senior adviser Eric Fehrnstrom • During an interview on MSNBC, saying that President Obama has been the true flip-flopper on how the ACA individual mandate’s penalties should be classified. Following last week’s Supreme Court ruling on the matter, many conservatives have been quick to call the individual mandate a tremendous tax hike, with Rush Limbaugh going so far as to say it will be “the biggest tax increase in the history of the world.” While that’s since been proven untrue, it’s a bit surprising to see the Romney camp bucking the party-line on this issue, especially since they were falling in line just a few days ago. source (via • follow)
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