Democrats propose a $1 Mil cutoff for tax hikes, rather than previous $250,000 cutoff
San Francisco, CA -- (SBWIRE) -- 12/18/2012 -- Both House Minority Leader Nancy Pelosi, and Senator Chuck Schumer of New York, expressed support for raising taxes specifically on those who earn $1 million or more per year. That constitutes a higher threshold than the previous marker of 'high earners' targeted by Democrats, which was at $250,000 per year.
Schumer and Pelosi declared their support for the president's position of the original $250,000 earners; however, the $1 million proposal may now serve as the lynchpin that keeps the two sides of the aisle willing to work together to avoid the impending 'fiscal cliff' that nobody tires of talking about.
There is a growing number of Republicans, led by R-Tennessee Bob Corker, who has called for a raising of tax revenue by capping the deductions at $50,000. That proposal would leave all of the middle-income individuals and households unscathed, while simultaneously raising the average tax rates on those within the top 2% of income distribution.
$800 billion in revenue is expected to be raised in a deduction cap like the one described above. That is half of the $1.6 trillion total that the Obama administration looks to raise from the incomes of high-earners. Most importantly, it is an amount that Republican leaders seem to believe is an acceptable line to draw in the sand.
The deduction cap does have a barrier. Lobbyists and charitable organizations will likely oppose the move, and will recognize the undermining of incentive for persons to gain high wages and wish to make large charitable donations.
President Obama has stated that high earners must expect a tax rate increase, but has made no commitment to a number as of now.
There are Republicans who have called upon Republicans to back legislation that extends the tax cuts brought on by President Bush, which are near expiration. It is, however, still considered a minority view.
The other sect of Republicans who support the Schumer-Pelosi proposal look to embrace the $1 million marker as an acceptable compromise, as opposed to the $250,000 cutoff.
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