The Associated Press

AP Source: Boehner Offers Millionaire Tax Hike

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. The person would only discuss the plan on the condition of anonymity because of the sensitivity of the negotiations.

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 Social Security.

Boehner’s tax proposal was first reported by Politico.

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 household 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 form 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. But he has also proposed about $200 billion in additional spending, including aid to the unemployed and to struggling homeowners and for public works projects.

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  • Mike

    The response will be interesting. This seems to be a compromise. A family making $250,000 is not rich – particularly since it often costs tens of thousands of dollars in loans to get advanced degrees before making this much. A Democrat (I think Schumer) proposed this level of tax, so it’ll be interesting.

  • littlelizard25

    I don’t feel it is any kind of comprimise. Boehner still wants to keep the upper income tax rates as low as possible, and put the shaft to seniors on SS and medicare. Those two programs should never be part of the spending cuts. He wants to cut spending for the people that need it most, and save the breaks for those that need it least. I hope Obama sticks to his guns this time and lets this country know just who the GOP regards as thier primary concern. It sure as hell is not the middle class.

    • fenway1

      You are so right! Let the wealthy keep their money and take it from the elderly who have worked all their lives! How shameful! Perhaps the tax will hit Boehner too hard and he would rather it hit his mother!

      • Matt

        Except that the money does not belong to the elderly. The average retiree these days takes far more than they ever paid in – and this is a pay through system so that there aren’t any earnings. If the far left doesn’t want to reform SS, fine, but it will bankrupt us.

  • chp3

    Well, it’s a start and while I agree the taxation at 1m instead of 200k should be a no brainer.
    1) Most folks making that money live in the most expensive geo’s, due to job or where they were raised.
    2) Get the money back from “Wall Street” via penalties, they got us here.

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