GOP Not Budging on Tax Rates After All
When the Fiscal Cliff negotiations began, President Obama was insisting that federal income tax rates should rise for couples earning $250,000 per year or more, while agreeing that tax-rate cuts should be extended for everyone else. The Republicans initially insisted that federal revenues only be enhanced through caps on tax deductions and the elimination of loopholes. President Obama last week said he would be willing to limit tax rate increases to taxpayers earning $400,000 per year or more. After criticizing the president for moving slowly during the negotiations, Boehner said that he would move ahead with a "Plan B" bill to raise the federal income tax rate for couples or businesses earning $1,000,000 or more per year to 39.6% from 35%, while protecting all other taxpayers. In an humiliating defeat late on Thursday, Boehner said in a statement that the House of Representatives "did not take up the tax measure today because it did not have sufficient support from our members to pass. Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff." Boehner added that the House had "already passed legislation to stop all of the January 1 tax rate increases and replace the sequester [mandated spending cuts] with responsible spending cuts that will begin to address our nation's crippling debt. The Senate must now act."