Pethokoukis, Politics and Public Opinion

Is this the compromise that will cost Boehner his speakership?

Image credit: Gage Skidmore (Flickr) (CC BY-SA 2.0)

Image credit: Gage Skidmore (Flickr) (CC BY-SA 2.0)

Wall Street is skittish and may force a fiscal cliff compromise. Chris Krueger of the Washington Research Group points to the Keep It Simple Stupid option:

This is the simplest solution, though Boehner will need A LOT of Democrats to pass it could well result in him losing the Speaker’s gavel.  This was the original Plan B that many Senate Republicans have endorsed, which involves passing the Senate-passed S.3412 “Middle Class Tax Cut Act.”  The bill has three big components:

1. One-Year Extension of All Rates for 98%.  ONE-YEAR extension of the current Bush Tax Cuts for those individuals making under $200K and couples below $250K (the 98%), including marginal rates, capital gains, and dividends.

2.  2012 AMT Patch

3. Dividend Tweak for the Top Rates. For those with income above the thresholds, the rate for both capital gains and dividends is 20% (doesn’t include the 3.8% Investment Income tax) unlike the shift to ordinary income for dividends in a full cliff dive.  Under this scenario, the top tax rates on capital gains and dividends would rise from 15% to 23.8% — much lower than the potential 43.3% dividend tax rate in a cliff dive.

The Senate bill also includes some limits on personal exemptions and itemized deductions for upper-income taxpayers — the re-instatement of so-called PEP and Pease limitations.  These can cause personal exemptions to be completely phased out for taxpayers in the top bracket and wipe out up to 80% of certain itemized deductions for very wealthy taxpayers.  But they are not as sweeping as other proposals to raise large amounts of revenue by cutting loopholes and deductions.

And still, you would get this:

4 thoughts on “Is this the compromise that will cost Boehner his speakership?

  1. Attention Members of Congress: Do Your Job! We suffered through your mind numbing campaign ads and phone calls, endured the relentless fundraising and money grabs, survived the mudslinging and venom of your political machines, and cast our votes. And still you fail to do your job.

    For once, stop worrying about elections two years away and do your job.
    For once, stop cowering to the likes of Grover Norquist (we didn’t elect him to anything) and do your job.
    For once, stop pandering to the mathematically challenged, big government, spread the wealth, spend until it’s gone nonsense of the far left and do your job.
    For once, embrace the serious, fundamental task of compromise and do your job.

    A deal on the fiscal cliff will not get done without tax hikes on millionaires. A deal will not get done without SERIOUS spending cuts (actual cuts and NOT just slowing the rate of spending increases). Do your job. We have a budget and appropriations process in Congress. Use it and don’t spend more than we have to spend. As of this morning, we have a National Debt of $16,358,536,098,814.50. You should not be on a plane heading to your home states for Christmas. You should be at work, huddled together with a big red marker and identifying TRILLIONS of dollars in spending cuts for the next decade because there aren’t enough millionaires to tax to make a dent in our crushing debt.

    Let go of your pet projects, abandon ridiculous campaign promises no one believed in the first place, offend your deep-pocket contributors and undo backroom deals that have no place in the game and do the job your were sworn to do. The economic health of our country is more important than your personal political careers. Shame on you and shame on us for allowing you to drag our country this far down the rabbit hole. Do your Job!

  2. The 123th Amendment doesn’t say anything about beginning a progressive tax system. The essense of our Constitution, also, is property and contract rights. Hence, Boehner and everyone else should keep all of the tax breaks for everyone and drastically reduce spending. As of this date, McConnell and Reid are negotiating. McConnell should refuse to negotiate if drastic changes (see Constitution: entitlements are unconstitutional) aren’t made to all entitlements. People will survive on their own. Businesses will survive without massive outlays of money from government. Try free market enterprise, the gold standard, and the Constitution.

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