New “fiscal cliff” compromise idea: Let’s raise taxes on the rich without raising their tax rates

posted at 6:46 pm on November 23, 2012 by Allahpundit

I don’t understand why either side would want to do this. Actually, wait, that’s not true: I kind of understand why Democrats would want to do it. If it happens, it’ll be a heavy bludgeon to use against Republicans in the next election cycle.

One possible change would tax the entire salary earned by those making more than a certain level — $400,000 or so — at the top rate of 35 percent rather than allowing them to pay lower rates before they reach the target, as is the standard formula. That plan would allow Republicans to say they did not back down in their opposition to raising marginal tax rates and Democrats to say they prevailed by increasing effective tax rates on the rich. At the same time, it would provide an initial effort to reduce the deficit, which the negotiators call a down payment, as Congressional tax-writing committees hash out a broad overhaul of the tax code.

That idea could be combined with the reinstatement tax code provisions that once prevented the rich from taking personal exemptions or itemizing deductions. Those rules were eliminated by the tax cut of 2001. Reinstating them would tack an additional one to two percentage points onto the effective tax rates of high-income households without raising the 35 percent rate, but which households would be affected has not been decided. In all, tax experts say, families in the top tax bracket would find their effective tax rate jump to 41 percent, even though the top statutory rate would remain 35 percent…

Under the existing tax code, the first $17,400 of adjusted gross income for a couple filing jointly is taxed at 10 percent. Above that level, up to $70,700, income is taxed at 15 percent. Income between $70,701 and $142,700 is taxed at 25 percent. Gross incomes up to $217,450 are taxed at 28 percent. The next bracket, 33 percent, ends at $388,350 for couples. The top bracket hits adjusted gross incomes only above $388,350.

In other words, instead of jacking up the top bracket from 35 percent to 39.6 percent, the way it was in the Clinton years, they’re going to essentially eliminate all of the lower brackets for taxpayers who earn beyond a certain amount (e.g., $400,000) and tax their entire earnings at 35 percent. No more marginal rates for high earners as described in the last paragraph of the excerpt. If you’re sitting on $399,999 in income and then you cross the magic threshold by earning another two bucks, boom — the marginal rates you used to calculate the taxes on your first $17,400, $70,700, $142,700, etc, instantly disappear and all the money you’ve made gets taxed at the top rate. In practice, then, this operates like a surtax of a fixed amount on top earners; if you look at the IRS’s tax tables, you can figure out the difference between $400,000 taxed entirely at 35 percent versus $400,000 taxed progressively at the current marginal rates. Unless I missed something, it’s upwards of $23,000. Whether you make $400K, $4 million, or $400 million, then, you’d be paying the same effective surtax under the “compromise” plan: An extra $23,000, on top of the 35 percent tax you’re paying as part of the top bracket.

Tom Maguire spots the problem:

Taking those tax brackets as Gospel, and relying on Excel and Keurig, I infer that if the effective average rate on income of $435,800 is 35%, the marginal rate from $388,350 to 435,600 must be 100%. Ouch. If all the phase-outs are spread out from $388,350 to $1,000,000 then the marginal rate over that bracket is 40%. In that scenario, everyone with income over $1 million will have an average rate of 35%; all income over $1 million will be taxes at a marginal rate of 35%…

And the politics of this intermediate high bracket are ludicrous for the Republicans. Obama wants to raise the top marginal rate on everyone above some threshold to 39.6% (Let’s round that to 40% for purposes of this mini-tirade). The Republican counter will be to raise the top marginal rate to 40% on incomes from $400K to $1 million and then cut the rate back to 35%? That may protect large small-business owners, but only by throwing the smaller successful ones overboard.

Paying an extra $23,000 is small potatoes if you’re making $10 million a year, but to a small business owner who’s pulling down $400,000 or a bit more, it’s a big deal. Note Maguire’s point about the 100 percent effective rate for incomes just above the magic $400K threshold. Imagine a business owner doing an earnings projection in November and determining that he’s on pace to pull down $410,000 this year. Once he’s hit with the surtax, his income will fall to $387,000. In other words, he’s … better off working less, to try to finish the year just under $400,000 in earnings so that he can keep his lower marginal rates intact. That would be less of a concern if you raised the threshold amount from $400,000 to, say, $1 million or $2 million, but I assume Democrats won’t go along with that. The amount they can raise from a $23,000 surtax aimed only at the very rich is nothing compared to the amount they could raise by restoring the top Clinton-era rate of 39.6 percent instead. (See The Monkey Cage for some back-of-the-envelope math.) To raise any real revenue this way, presumably, they’ll need to keep the threshold fairly low and target a broader taxpayer base. Right in the butter zone for small business owners.

If you don’t see already how the left will use this against the GOP in 2014 or 2016, check the title of the Monkey Cage post or read Kevin Drum. Agreeing to the compromise won’t help Republicans escape “party of the rich” demagoguery; on the contrary, the attacks will escalate on grounds that the GOP is willing to soak small business owners with a surtax in order to spare the extremely wealthy a rate hike that might really take a bite. Maybe that’s a political price worth paying for the economic benefits Republicans perceive in keeping taxes on the very rich as low as possible, but it is a price. Via Mediaite, in case you missed it yesterday, here’s Saxby Chambliss weighing his pledge not to raise taxes against the country’s need to close its deficit black hole.


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GOP=Dustbin of history.

In other news, FNC talking heads all aroused after learning Jeb Bush will run in 2016.

Mr. Arrogant on November 23, 2012 at 6:53 PM

“Compromise” read capitulation.

davidk on November 23, 2012 at 6:54 PM

Personally I’d be really surprised if the really rich don’t already have their tax teams figuring out how to shelter their money regardless of how D.C spins it.
It all gets back to what is rich? The definition of rich may turn out to be the poor sm*ck who ends up being gored by the tax revision.

katiejane on November 23, 2012 at 6:56 PM

FISCAL cliff?

Baby you better be worried about the CULTURAL Cliff……..we’ve already gone over it.

The country is lost people.

http://www.myfoxdc.com/story/20169595/video-shows-shoppers-pushed-shoved-during-black-friday-sales

PappyD61 on November 23, 2012 at 6:57 PM

We need to elect Ben Dover.

He loves to compromise over and over like a con in name only.

SparkPlug on November 23, 2012 at 7:00 PM

Either have the President write the “Prescription for Prosperity™” and let him own it outright -and have run on it for his third term- or fight to the last man.

Personally, I say give him what he wants, speak out against it on the floor, and then abstain from the vote. Just as Obamacare will become a curse word and scrubbed from every history book in a decade, so to will Obamanomics. At least if we give it to him in full, we can get past the pain and start the healing rather than drag this out until we’re a permanent minority.

BKeyser on November 23, 2012 at 7:02 PM

Makes perfect sense to me.

OH LOOK! A MARBLE!

Ugly on November 23, 2012 at 7:02 PM

Nothing bespeaks high quality website and forum like an unclosable full screen pop-up.
Next up: porn link pop ups on the Green Room.

Dr. Carlo Lombardi on November 23, 2012 at 7:03 PM

Looking forward to backing Karen Handel in her primary race against Saxby Chambliss. Handel is a patriot and is willing to defend her conservative convictions even if the MSMers don’t like it.

Robert_Paulson on November 23, 2012 at 7:03 PM

They just can’t keep their thieving fingers out of other people’s pockets, can they?

OldEnglish on November 23, 2012 at 7:04 PM

I don’t understand why either side would want to do this. Actually, wait, that’s not true: I kind of understand why Democrats would want to do it. If it happens, it’ll be a heavy bludgeon to use against Republicans in the next election cycle.

I think I will wait and see what actually happens. There are so many rumors that I have doubts about a lot of what I hear…but I have to say, why would this really hurt Republicans? Obama and the Democrats have been yakking about raising taxes for some time and it has not done them any harm. My guess is most voters would be fine with something like this. That does not mean it would be a good idea, but then again re-electing Obama was not a good idea and they did it anyway.

Terrye on November 23, 2012 at 7:07 PM

i can just picture boehner sitting on all fours, reading obamas putts for him.

renalin on November 23, 2012 at 7:07 PM

These suicidal morons will not only do what the Dems want, but they’ll also get the credit when it fails! You eSTABrepubs are showing yourselves to be quite stupid! As well as, gullible! LMAO! It’s no wonder the Dems beat you idiots and make you look like blithering dunderheads, in the process. Tell me again how smart you rinos are? Just keep right on losing, in the most idiotic & embarrassing manner, it’ll be easier to keep everyone from voting for you morons!

http://www.paratisiusa.blogspot.com

God Bless America!

paratisi on November 23, 2012 at 7:08 PM

This is silly. Instead of finding a sneaky way to raise taxes that would just obscure who is actually responsible for is, the GOP should just give Obama the rate hikes he campaigned on and let him own it.

Mark1971 on November 23, 2012 at 7:09 PM

Why are the people who caused the problem…

… the one’s entrusted to fix it?

Seven Percent Solution on November 23, 2012 at 7:09 PM

Sounds like the perfect scam Chief Just-Us Benedict “Egomania” Roberts would reliably prostitute his gavel towards.

It’s not a TAX tax… it’s a tax TAX ….

viking01 on November 23, 2012 at 7:09 PM

Meh.

HerneTheHunter on November 23, 2012 at 7:11 PM

no matter what happens the gop will get blamed…its the dem M.O. with lsm helping them along…

cmsinaz on November 23, 2012 at 7:13 PM

Republicans need to offer to tax “Wealth” at 50%, now that will wake up Hollyweird. Tax the already rich not those trying to get there – well, just thinking out loud and it would affect the Kennedys and Kerrys so it will never happen.

rgranger on November 23, 2012 at 7:16 PM

Democrats (and Republicans it seems) don’t understand that money is a representation of effort and valueless in and of itself.

To wit… If you’re going to take more of my money for working harder… I’ll take my “coin” in my own time and stop contributing.

You want to turn is into Cuba? Here let me speed you on your way.

Skywise on November 23, 2012 at 7:16 PM

Agreeing to the compromise won’t help Republicans escape “party of the rich” demagoguery; on the contrary, the attacks will escalate on grounds that the GOP is willing to soak small business owners with a surtax in order to spare the extremely wealthy a rate hike that might really take a bite. Maybe that’s a political price worth paying for the economic benefits Republicans perceive in keeping taxes on the very rich as low as possible, but it is a price.

Debbie’s Flowers vs. Trump Enterprises.

Ladysmith CulchaVulcha on November 23, 2012 at 7:19 PM

Because I’ve come to the conclusion that the only way we’re going to have a chance to save this country in 2 and 4 years from now is via taxpayer and health care revolts, let’s start the first one by letting the Democrats have and own the highest tax increase in the history of the world by simply giving them what they’ve asked for.

The second revolt will begin in 2014 when the Obamacare goes into full effect, including those tax hikes as well.

The confluence of these will be the perfect storm and will demolish the Democrat Party for generations to come.

TXUS on November 23, 2012 at 7:22 PM

An additional $23,000 “hit” on a businesspersons tax bill for the same amount of income? Count on one more employee in the unemployment line to “pay” for it.

RADIOONE on November 23, 2012 at 7:24 PM

Eh, seriously… just let it burn. The people have made their decision, lets just get this over with, no sense in prolonging it.

Timin203 on November 23, 2012 at 7:36 PM

Sadly, elections do have consequences and we have only just begun to learn the awful ones which await us with the One back in office for another four years.

And sadly, there is nothing to be done about it for at least two years.

He won, they won, sigh.

Jvette on November 23, 2012 at 7:37 PM

God Bless America!

paratisi on November 23, 2012 at 7:08 PM

Time to step away from the crack, son. I looked at your web site and all I can say is…wow. Psychodelic, man! Did Timothy Leary help you with that? :)

scalleywag on November 23, 2012 at 7:38 PM

R’s need to write the bill that taxes 1%’s at 91%. Elections have consequences. Give Obama more than he wants. Let the Democrats choke on it. Enough of this capitulation bs.

txhsmom on November 23, 2012 at 7:38 PM

Our ideals took a beating during the 30′s and didn’t even begin to recover until the late ’70′s / ’80s. We thought that was the new normal and we were a “center right country,” but history it seems is beginning to show that that brief moment in time was the anomaly and that conservatism is on the sidelines (and lets be honest, it has been for a while)

Timin203 on November 23, 2012 at 7:41 PM

If they are actually considering the version of this that is presented here, they are insane. Higher pre-tax earnings corresponding to lower after-tax earnings creates horrible incentives (obviously) and should be a dealbreaker, for Democrats as well. Are these people totally stupid?

ggoofer on November 23, 2012 at 7:41 PM

Not even Boehner could be stupid enough to agree to this.

Please?

AZfederalist on November 23, 2012 at 7:42 PM

Higher pre-tax earnings corresponding to lower after-tax earnings creates horrible incentives (obviously) and should be a dealbreaker, for Democrats as well. Are these people totally stupid?

ggoofer on November 23, 2012 at 7:41 PM

I’m really afraid we are going to get an answer to that question soon.

AZfederalist on November 23, 2012 at 7:44 PM

Not even Boehner could be stupid enough to agree to this.

Please?

AZfederalist on November 23, 2012 at 7:42 PM

Heh. In Washington, usually “compromise” means something both bases don’t like, that both parties feel they can still sell to their base.

Timin203 on November 23, 2012 at 7:44 PM

Heh. In Washington, usually “compromise” means something both bases don’t like, that both parties feel they can still sell to their base.

Timin203 on November 23, 2012 at 7:44 PM

Not exactly. In Washington, “compromise” usually means the Republicans caving to the democrats’ demands.

/yeah, not exactly encouraging, is it?

AZfederalist on November 23, 2012 at 7:46 PM

Enough of this capitulation bs.

txhsmom on November 23, 2012 at 7:38 PM

I totally agree. Let Obama get what he wants and let the cards fall where they may. Truth be told though, the man has no idea what he wants, he’s not going to write the legislation, he probably won’t even meet with Congress or sit in on meetings or negotiate. It will be more of the last four years and he’ll just sit on the sidelines and play some golf and go on the sleazy talk shows while everyone else tries to put together a plan. He HAS NO PLAN.

scalleywag on November 23, 2012 at 7:47 PM

How about we make an “Entertainment Tax”? If you make more than $1M a year as part of the entertainment industry, you pay a 70% tax.

nazarioj001 on November 23, 2012 at 7:48 PM

We all know how its going to end don’t we? Does anybody really think that Scotty is going to fall in the well? Blinky the Wonder Dog will save him of course, and the Republicans will cave in to the Democrats. It’s all just part of the script, and the cliffhanger scenes just there for dramatic purposes.

sharrukin on November 23, 2012 at 7:57 PM

I’m starting to agree with the “Let it burn” faction. Make the democrats come up with the plan and then vote present. A few years of higher taxes along with the explosion of Obamacare expenses and rising food and energy costs might knock some sense into the stupid people in this country. Speed it up so we can get through with it quicker.

Night Owl on November 23, 2012 at 8:00 PM

I am a small business owner. I will probably never make $400,000 a year. However, if I ever was doing that well and it was November 30th and I was at $375,000, it sounds as if I would be better off closing for December than being open because I would end up making more take-home pay by not breaking into the ludicrous tax bracket and having it effect my entire previous earnings. Under that scenario, I would close for the month and people would lose their jobs just before Christmas.

Theophile on November 23, 2012 at 8:02 PM

Wasn’t it George Carlin who said that in Washington “bipartisan” means something far, far larger than the usual swindle was being pushed through?

I expect Boenher to do pretty much the same thing he’s done the past couple years besides admiring his corner offices and working on the perfect fake tan now approaching AlGore debate orange-man goofiness. Practically nothing.

viking01 on November 23, 2012 at 8:04 PM

Republicans need to allow Obama’s tax increase on the wealthy just as he asks. Make sure in a very public way they tell the American people that they are doing so because Obama won the election but they still think its a bad idea. Democrats have done a masterful job painting the GOP as the party of the rich and it was one of the causes for Romneys loss. 8 of the 10 wealthiest counties voted Obama. If its bad for the economy in 2 yrs we can blame it on Dems and take Senate

Dennis D on November 23, 2012 at 8:04 PM

Repeat after me

The GOP will betray you

How many years have I been SHOWING you the acts of betrayal. Over and over again. Look what they did to The Tea Party after they helped the GOP get control again, they colluded with the Dems to shut them out of important legislation.

That must be clarion call of this site. Only the acceptance of reality will effect any real changes to this nation.

The GOP will betray you…Just like Chambliss did…

True_King on November 23, 2012 at 8:08 PM

Theophile on November 23, 2012 at 8:02 PM

Well, you know, at some point, you will have earned enough money.

I guess enough is now, $399,999.

All praise Obama.

Jvette on November 23, 2012 at 8:09 PM

Why not just let the democRATS have what they want?
Every Republican member of congress should simply vote “present” on any of these tax bills.
Then, the ‘rats own the results. No way they can point fingers at the Republicans and blame bad results on them.
What are they going to say? “You should have voted against the bill so we wouldn’t have screwed America”?

Solaratov on November 23, 2012 at 8:10 PM

This is the worst of all possibilities.

First off, that idea of taxing those making over $400k at all 35% is nuts. You would actually get more take home pay by working less! It’s hard to imagine a worse government incentive system.

At least if you raise the tax rate, it’s out in the open. If they do this, it’ll have the effect of a likely even bigger tax increase, but because it would be a hidden tax, it would be easy for the media to ignore, and thus the masses will think we never raised taxes, and will still want to raise taxes even more.

Welcome to the Soviet Union, comrade.

netster007x on November 23, 2012 at 8:19 PM

However, if I ever was doing that well and it was November 30th and I was at $375,000, it sounds as if I would be better off closing for December than being open because I would end up making more take-home pay by not breaking into the ludicrous tax bracket and having it effect my entire previous earnings. Under that scenario, I would close for the month …

Theophile on November 23, 2012 at 8:02 PM

It would be at the $400K profit threshold, but yes, your scenario is exactly what will happen. Providing a disincentive to make $400K over $399.999K (or any other arbitrary level) is going to cause lots of unintended consequences. In this case, you will see a gap where people stop making money at $399.999K and don’t start making money until they achieve a level that makes it worth the effort for the reward.

Just a quick check using the 2011 Tax Tables for Married Filing Jointly p 98:

At 2011 rates, if you make $400K taxable income now, you will pay $109,872 in federal taxes. So, even at today’s rates, $400K in taxable income means you get to keep $290,129. Seems kind of confiscatory already, but hey, that’s just me I guess.

Under the proposed stupid idea, for $400K taxable income, you will owe $140,000 in federal taxes, an increase of $30,129. Now, if you make $399,999 under this paradigm, you owe $109,871. That $1 in extra income costs you $30,129. So, how much do you need to make to get that $30,129 back? Just to break even in terms of amount you get to keep ($290,129), you need to make $446K, or an increase of $46,352 just to keep the same amount as you would keep at $400K under today’s rules. That’s just breakeven, for every dollar over that, you get to keep 65 cents. How much incentive is there to put forth the effort and labor to make $46K more in taxable earnings just to make one dollar more than if you only earn $399,999? In so doing, you will be paying an extra $16K in taxes than if you earned $399,999, and $46K more in taxes than you pay under the existing rules.

Yeah, that will really encourage people to work to expand and grow their business or expend the effort to get that next promotion.

AZfederalist on November 23, 2012 at 8:35 PM

I’m coming around to being part of the let Dems own this burning bag of shit and let them raise the rates. It’s not like it’s gonna work. It’s not gonna raise as much money as they say and we’ll still out of control spending that won’t be addressed.

gsherin on November 23, 2012 at 8:35 PM

If the GOP was the party of small business entrepreneurs and the working middle class, this idea would never have made it to the light of day.

It is time for a third party that primarily looks out for the interests of small entrepreneurs and the workers they employ.

fadetogray on November 23, 2012 at 8:41 PM

Republicans need to allow Obama’s tax increase on the wealthy just as he asks. Make sure in a very public way they tell the American people that they are doing so because Obama won the election but they still think its a bad idea.

Dennis D on November 23, 2012 at 8:04 PM

No! It won’t work that way. Even if every single republican stayed out of the House the day the vote was taken, the dems and the MSM (but I repeat myself) would spin this as, “It’s the Republicans’ fault! They let us do what they knew was going to turn out badly! They should have stood against these bad policies and stopped us!”

/Yes, I’m serious, and you know deep in your heart of hearts that this is how such an action would be spun. Remember in 1992, it was GHW Bush’s fault that taxes were raised because he broke his no new taxes pledge. It was never suggested that it was the fault of democrat-controlled House and Senate that forced him into that agreement.

I’m sorry, but the Republicans standing by and not taking a stand is only going to end badly for the Republicans.

AZfederalist on November 23, 2012 at 8:41 PM

It is time for a third party that primarily looks out for the interests of small entrepreneurs and the workers they employ.

fadetogray on November 23, 2012 at 8:41 PM

This. Unfortunately, it looks like the GOP has lost its will to live. It certainly does not have the male anatomical necessities for procreation.

AZfederalist on November 23, 2012 at 8:43 PM

I don’t know if you noticed or not but this country made a choice on November 6th…..AND THEY WANT THE RICH PEEPS TO PAY for their FREE STUFF!!!!!!

Fork it frigging over rich boys!!!

…..and you “let it burn” faction THE FIRE WILL CONSUME ALL of us!!

As long as the media controls the story, and no one will STAND UP against Obama…….it’s not gonna happen.

PappyD61 on November 23, 2012 at 8:56 PM

How about everyone pays a 30% tax rate over a $60,000 standard deduction with no itemized deductions or credits. Thus business decisions get made at the 30% marginal tax rate rather than the 43% + we will be seeing otherwise. That will mean more revenue for the government but more investment decisions are bankable because capital budgeting is done at the marginal tax rate not the overall tax bill. This also avoids alot of non-economic activity to manipulate the tax bill or giving congress lots of influence over private behavior by tax favors.

KW64 on November 23, 2012 at 8:58 PM

…..and you “let it burn” faction THE FIRE WILL CONSUME ALL of us!!

No, it won’t. The stinking rich can go to hell. They are mostly Democrats now. They support Democrats with money. They like it when the Democrats increase regulations for any reason at all, since the higher marginal costs smaller competitors face from those regulations make those competitors less competitive.

The real rich are not the ones that make the economic engine go. Most of them just languish in the wealth gathered by their ancestors and screw up our economy and our political system.

This stunt of theirs with the taxes is just a particularly clumsy way they are again trying to screw those of us trying to climb up the ladder.

fadetogray on November 23, 2012 at 9:10 PM

This also avoids alot of non-economic activity to manipulate the tax bill or giving congress lots of influence over private behavior by tax favors.

KW64 on November 23, 2012 at 8:58 PM

Well, that right there tells you why your idea will never work. Couldn’t have the congresscritters cut out of the loop now, could we? People might start deciding they aren’t as important as the congresscritters think themselves to be.

AZfederalist on November 23, 2012 at 9:13 PM

..there may be a need for an actual party…a third party…called the Tea Party…I look at Bonehead…McCuddle….and this talk of Jeb Bush…I don’t want to play make believe with Republicans anymore if they can’t get some ba11s!

KOOLAID2 on November 23, 2012 at 9:36 PM

Just give the Marxists what they want, and let them hang themselves.

The Rogue Tomato on November 23, 2012 at 9:39 PM

We need to elect Ben Dover.

He loves to compromise over and over like a con in name only.

SparkPlug on November 23, 2012 at 7:00 PM

We didn’t already?

Steve Eggleston on November 23, 2012 at 9:42 PM

Just give the Marxists what they want, and let them hang themselves.

The Rogue Tomato on November 23, 2012 at 9:39 PM

So you’re writing off your kids’ and grandkids’ future and hoping your great-grandkids do better than the Russians “post-Communism”.

Steve Eggleston on November 23, 2012 at 9:43 PM

Yeah, not voting R until they grow a spine and actually start talking about how disgusting it is to force people to work for government under threat of imprisonment, aka income taxes. Can’t believe anybody would consider voting for this spineless party as it currently is.

clearbluesky on November 23, 2012 at 10:11 PM

It’s a truly dumb idea to create a situation where someone has zero or even negative financial incentive to produce more at some given income level, and I’m all for people calling up their members of congress to let them know how dumb it is, but let’s not freak out about a proposed deal when it’s pretty sketchy who is even pushing for this deal. Are at least a handful of Republicans stupid enough to vote for this? Sure, I suppose. But when an idea is so obviously stupid, I guess I want to know the names of people who actually support this before I start believing this is really going anywhere. Besides, this is in the NYT. Why would we as conservatives believe most things in their paper to be crappy liberal propaganda and then suddenly believe they are giving us an accurate account here? I’d rather judge the Republican based on what they actually do and say vs. what the NYT says. The NYT has no real purpose any more except to help Democrats and demoralize, antagonize, and ridicule conservatives, so take this report with a grain of salt.

MinnesotaSlinger on November 23, 2012 at 10:35 PM

Bend ovah. Take it. Like it. It only hurts for a little while.

SouthernGent on November 23, 2012 at 11:00 PM

One word for RINOs: SUCKERS!!!!

You people don’t even have the negotiating skills of Charlie Brown arranging for a kickoff with Lucy as the holder.

You’d think the RINO’s would learn from the Liberal Spendocrats: How about proposing spending cuts NOW, and tax increases 10 years from now?

landlines on November 23, 2012 at 11:44 PM

So the goal is to make the tax code MORE complicated?

W.T.F. is there nobody in Congress capable of thinking?

gekkobear on November 24, 2012 at 12:18 AM

So you’re writing off your kids’ and grandkids’ future and hoping your great-grandkids do better than the Russians “post-Communism”.

Steve Eggleston on November 23, 2012 at 9:43 PM

Actually, yes. If there isn’t a revolution in the USA to fix things, then I’ll help my kids and grandchildren move out.

The Rogue Tomato on November 24, 2012 at 1:12 AM

If the GOP gives Obama increased revenue without raising rates, the Dems will still use it as an issue in 2014 and 2016. The GOP must insist on Obama making a first proposal and it must be done publicly and open to scrutiny. The GOP leaders should not say anything more until Obama does this. They must insist on a Federal Budget coming out of the Senate before they sign off on anything.Defund the Obamanation. That is your weapon. Use it!!!

K Michael ODonovan on November 24, 2012 at 2:27 AM

If the GOP gives Obama increased revenue without raising rates, the Dems will still use it as an issue in 2014 and 2016. The GOP must insist on Obama making a first proposal and it must be done publicly and open to scrutiny. The GOP leaders should not say anything more until Obama does this. They must insist on a Federal Budget coming out of the Senate before they sign off on anything.Defund the Obamanation. That is your weapon. Use it!!!

K Michael ODonovan on November 24, 2012 at 2:27 AM

…late to the party….but…THIS! ^ ^ ^

KOOLAID2 on November 24, 2012 at 4:15 AM

I think this proposal is a really bad idea and the GOP need to walk away from it..Period..:)

Dire Straits on November 24, 2012 at 7:14 AM

ain’t going to happen, I thought of that a while back, it won’t happen for the same reason, a flat rate tax won’t, it affects everyone the rich would not be able to shelter their money, would eliminate tax accountant/lawyer jobs. the politicians know which side of the bread is buttered.

RonK on November 24, 2012 at 7:35 AM

I think this proposal is a really bad idea and the GOP needs to walk away from it..Period..:)

Dire Straits on November 24, 2012 at 7:14 AM

Fixed..:)

Dire Straits on November 24, 2012 at 8:12 AM

Any deal that involves Boenher will be a sell-out. During the midterm elections Republicans will lose their House Majority and we will once again have one-party in control of all branches.

Some previously wise House members have been cowed by the last election. They’ve misread the results to mean that more compromise somehow will translate into future electoral victory. Nothing could be further from the truth.

Now you’ve got people like Chambliss dropping their anti-tax pledge. The Vichy-Republicans are on the rise.

Democrats have successfully stopped the Senate from functioning. Yet where are the repercussions? How about a weekly press conference from Republican leadership pointing out what they’ve done as opposed to what the Senate has done? Anybody there…hellooo?

Republicans problem is they can’t get Republicans to the voting booth. It’s not about appealing to some demographic or throwing a bone to the moochers. It’s about principle and articulating a vision that people can relate to.

This crop of so-called leadership is a failure. And under their stewardship we will see the Republican Party demise.

Good riddance.

Marcus Traianus on November 24, 2012 at 9:45 AM

Boehner – just one more reason I stopped calling myself a Republican. I didn’t leave the Republican Party, it left me.

Looking for a third party that really believes in small government and takes no stand on social issues; because if you can’t get the fiscal house in order, the social issues don’t matter – and if you get your fiscal house in order, a large number of the social issues resolve themselves.

Over50 on November 24, 2012 at 10:24 AM

All of this “soak the rich” is pure posturing, but Republicans have to learn to play the game.

My advice? Propose something like a “billionaire’s tax” and make it absurdly high. It will affect something like 20 people in this country (most of the Obama bundlers) and then Republicans can actually craft a tax plan that helps grow the economy instead of getting stuck “defending tax cuts for the rich.”

BradTank on November 24, 2012 at 10:44 AM

Does this run afoul of the equal protection clause?

besser tot als rot on November 24, 2012 at 10:59 AM

And, holy cow, if you’re making $399K, avoid any extra income at all costs unless you can make at least another $100-200K.

besser tot als rot on November 24, 2012 at 11:00 AM

No matter what comes of this “deal” Obama, Democrats, and the MSM will attempt to savage Republicans over it. It will be “they sacrificed middle-class tax relief for protecting their rich friends.”

That’s why the best strategy is to simply say “no deal” or propose something Obama will have to shoot down, like repealing parts of Obamacare.

Let the tax rates reset back to the Clinton levels. The middle class will then understand elections have consequences and Obama is going to take a hit for holding the middle class hostage to get his tax increase on the 1%.

His whole campaign was the “Clinton model”, let him have it.

BradTank on November 24, 2012 at 11:04 AM

There is a feeling that certain people do overdo the tax deductions A.K.A. Loopholes. They would rather pay an expensive lawyer, accountant etc. I am not really judgmental but it does give all wealthy people a target on their back.

Why should a wealthy person get a $7,000 tax credit for buying a Volt? for buying new windows that happen to be energy efficient, and of course at the Corporate level we see GE exhausting their ability to find credits until their tax bill looks as if they did not pay.

Simplicity would be fairer. No Gimmicks like the Volt tax credit. Simplicity does not need to be Audited, no games have to be justified with attorneys and accountants. (Uh oh, less work for these nice people.)

So, I agree that they may say that taxes are going up, by way of less deductions and fewer games. The media will want to label anyone with the Norquist tax pledge a cop out, and the tea party might too, if they are literalist, but I don’t think it should count against a pledge if you change some loopholes that other tax payers feel are equally unfair. I think Norquist needs to express his opinion on these loopholes too as a guideline, because the media will MASACRE his people as a way to alienate us one from another.

I think that Congress should re write the tax code, with a rule of simplicity, and following the Simpson Bowles guideline, Obama’s own initiative, that I think said taxes/spending should only be based on 21% of GDP. I really don’t think that is To Be with the gridlock in Washington, and Harry Reid spending what should be his retirement years causing trouble in the Senate.

But here is something else they could condsider.

http://en.wikipedia.org/wiki/Alternative_minimum_tax

Although the AMT was originally enacted to target 155 high-income households, it now affects millions of families each year. The number of households that pay the tax has increased significantly in the last decade: In 1997, for example, 605,000 taxpayers paid the AMT;[50] by 2008, the number of affected taxpayers jumped to 3.9 million, or about 4% of individual taxpayers.[51] A total of 27% of households that paid the AMT in 2008 had adjusted gross income of $200,000 or less.

The AMT should be indexed to the incomes of X million dollars and up. I am a conservative too, but there is no reason for republicans to continue to treat people who make 250K as if they are millionaires and billionaires. I don’t like it when people like Liz Warren says a billionaire makes $250K, and I guess I don’t like it when republicans operating under their divided we fall, treat people in the $200K -$250K income level that way BY DEFAULT. Republicans do themselves no favors with high taxes on families making $75-$250K where a lot of benefits fall off. That is the real middle class, not Obama’s New Normal middle class person who makes $40K. (You in the outback will have to believe me.)

The taxes on married $250K leave a family with half their money after taxes. OR LESS when you add in state local/property taxes.

Optimally, state taxes need to be deductible from the federal bill. I know the states differ on income tax, but property taxes are higher where there is no state tax, and those need to be part of the tax bill. And the poor they complain that they pay Social Security taxes, Medicaid and Medicare. Some of that is a tax, and some of it is for you. That is open to exploration. …And then, we should be able to deduct from our federal bill our Obama care inspired taxes…WHATEVER THEY ARE, since it is not forthcoming….

The ideas might need to be generated from outside of D.C., and submitted to the Congress for their consideration, with a prize given for simplicity, cheap enforcement, and no tricks.

In the meantime, The House needs to push spending cuts, and publish how expensive the Obama Administration big government is to run compared to 2008. I want charts and graphs and slogans.

Fleuries on November 24, 2012 at 11:47 AM

As an actual business owner, not some bloviated blogger or politician, when approaching tax walls, the solution is to do most anything one can to avoid the tax.

* Working less is a viable option. It’s my preferred option — goof off now to work another day later… But that’s just me…
* Take a few business deductible trips or continuing education.
* Buy some business things that you may or may not need, but are business deductions. Your work office can always use a couple backup big screen TVs — store them at home if you must…
* Talk to your accountant on how to set up and execute various loop holes that let you redirect your excess income into other financial vehicles that pay less tax. There’s deep catalog of tricks accountants used to use to ‘hide’ income back before Reagan cut tax rates down from way over 50%. Just brush the dust off and get busy at being inefficient.
* Stash as much money in tax deductible (pension) benefits as you can.

When that’s exhausted, there’s always the fall back — Charge more for the goods and services that you provide.

drfredc on November 24, 2012 at 1:15 PM

The only thing that we can do at this point is not raise the debt ceiling. Just leave it where it is. That is all that we have left.

We can’t control spending through the budget process because the Democrats refuse to pass a budget and every time the debt ceiling is raised, they consider it a budget.

Thus, don’t raise the debt ceiling. This is our last and final option to fight the current behemoth.

Then, pass a budget that is balanced and watch the Democrats _have_ to pass a budget in the Senate (finally) in order to even try to negotiate a lower raise in the debt ceiling and/or a smaller deficit.

Theophile on November 24, 2012 at 3:15 PM