December 16, 2012 in Nation/World

Source: Boehner offers tax hike

Higher rate would apply to $1 million earners
Jim Kuhnhenn Associated Press
 

Boehner
(Full-size photo)

WASHINGTON – Signaling new movement in “fiscal cliff’ talks, House Speaker John Boehner has proposed raising the top rate for earners making more than $1 million, a person familiar with the negotiations said. President Barack Obama, who wants higher top rates for households earning more than $250,000, has not accepted the offer, this person said.

The proposal, however, indicated progress in talks that had appeared stalled.

As part of a broader budget deal, Boehner is still seeking more spending cuts than Obama has proposed, particularly in mandatory health care spending. Boehner has asked for a long-term increase in eligibility age for Medicare and for lower costs-of-living adjustments for Medicare.

A Boehner aide would not comment on the report.

At issue are expiring tax rates that would automatically increase on Jan. 1 for virtually every income tax payer if Congress and the president don’t act. Steep budget cuts are also scheduled to kick in, unless Congress and Obama agree to forestall them with other deficit reduction measures.

Obama has insisted on extending current rates for the 98 percent of taxpayers in households that earn less than $250,000. He would let the top two marginal rates increase from 33 percent to 35 percent and from 36 percent to 39.6 percent for those taxpayers making over that threshold.

Until now, Boehner had maintained his opposition to raising any rates. Instead, he had proposed to raise up to $800 billion in tax revenue over 10 years by limiting tax loopholes and deductions as part of a broad tax overhaul.

But the speaker and House Republicans have come under increasing pressure from a number of Senate Republicans who say they should yield to Obama’s demand on tax rates and then press him for additional cuts early next year in exchange for an increase in the nation’s borrowing limit.

Obama has proposed about $600 billion in spending reductions over 10 years, including about $350 billion in Medicare and other health care savings.

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