Senator: GOP could accept tax hikes on very rich
WASHINGTON (AP) - Senate Republicans would probably agree to higher tax rates on the wealthiest Americans if it meant getting a chance to overhaul costly government entitlement programs like Medicare and Social Security, a GOP senator predicted Sunday.
The comments by Bob Corker of Tennessee - a fiscal conservative who has been gaining stature in the Senate as a pragmatic deal broker - puts new pressure on House Speaker John Boehner and other Republican leaders to rethink their long-held assertion that even the very rich shouldn't see their rates go up next year. GOP leaders have argued that the revenue gained by hiking the top two tax rates would be trivial to the deficit, and that any tax hike hurts job creation.
But Corker says insisting on that red line - especially since President Barack Obama won re-election after campaigning on raising tax rates on the wealthy - might not be wise.
"There is a growing group of folks looking at this and realizing that we don't have a lot of cards as it relates to the tax issue before year end," Corker told "Fox News Sunday."
If Republicans agree to Obama's plan to increase rates on the top 2 percent of Americans, Corker added, "the focus then shifts to entitlements and maybe it puts us in a place where we actually can do something that really saves the nation."
Besides getting tax hikes through the Republican-dominated House, Corker's proposal faces another hurdle: Democrats haven't been receptive to GOP proposals on the entitlement programs. Senate Democratic Whip Dick Durbin, D-Ill., on Sunday was skeptical about proposals to increase the eligibility age for Medicare from 65 to 67. He said he doesn't see Congress addressing the complicated issue of Medicare overhaul in the three weeks remaining before the end of the year.
"I just don't think we can do it in a matter of days here before the end of the year," Durbin said. "We need to address that in a thoughtful way through the committee structure after the first of the year."
The clock is ticking to avert the so-called "fiscal cliff," when a combination of automatic tax increases and spending cuts kick in at the beginning of the year. Negotiations are taking place primarily between Obama and the GOP's Boehner, whose party controls the House and comprises mostly hard-line fiscal conservatives who are holding fast to their position.
"No Republican wants to vote for a rate tax increase," said Rep. Jeb Hensarling, R-Texas, chairman of the House Republican Conference.
Added Rep. Marsha Blackburn, R-Tenn.: "I'm not sure there is support for the rate hikes. There is support for revenue by cleaning up the code."
But at least one House Republican has said there is another way. Rep. Tom Cole, of Oklahoma, has said Obama and Boehner should agree not to raise tax rates on the majority of Americans and negotiate the rates for top earners later. Cole said Sunday that most House Republicans would vote for that approach because it doesn't include a rate hike.
"You know, it's not waving a white flag to recognize political reality," Cole said.
Sen. Tom Coburn, R-Okla., already has said he could support higher tax rates on upper incomes as part of a comprehensive plan to cut the federal deficit.
When asked Sunday what it would take to sign on to a tax rate increase, Coburn echoed Corker's comments by responding: "Significant entitlement reform." He quickly added, however, that he has estimated that such a tax rate increase would only affect about 7 percent of the deficit.
"Will I accept a tax increase as a part of a deal to actually solve our problems? Yes," Coburn said. "But the president's negotiating with the wrong people. He needs to be negotiating with our bondholders in China, because if we don't put a credible plan on the discussion, ultimately, we all lose."
Obama's plan would raise $1.6 trillion in revenue over 10 years, partly by letting decade-old tax cuts on the country's highest earners expire at the end of the year. He would continue those Bush-era tax cuts for everyone except individuals earning more than $200,000 and couples making above $250,000. The highest rates on top-paid Americans would rise from 33 percent and 35 percent to 36 percent and 39.6 percent.
Boehner has offered $800 billion in new revenues to be raised by reducing or eliminating unspecified tax breaks on upper-income people. The Republican plan would cut spending by $1.4 trillion, including by trimming annual increases in Social Security payments and raising the eligibility age for Medicare.
Hensarling and Coburn spoke on ABC's "This Week." Blackburn and Cole spoke on CNN's "State of the Union." Durbin spoke on NBC's "Meet the Press."
The comments by Bob Corker of Tennessee - a fiscal conservative who has been gaining stature in the Senate as a pragmatic deal broker - puts new pressure on House Speaker John Boehner and other Republican leaders to rethink their long-held assertion that even the very rich shouldn't see their rates go up next year. GOP leaders have argued that the revenue gained by hiking the top two tax rates would be trivial to the deficit, and that any tax hike hurts job creation.
But Corker says insisting on that red line - especially since President Barack Obama won re-election after campaigning on raising tax rates on the wealthy - might not be wise.
"There is a growing group of folks looking at this and realizing that we don't have a lot of cards as it relates to the tax issue before year end," Corker told "Fox News Sunday."
If Republicans agree to Obama's plan to increase rates on the top 2 percent of Americans, Corker added, "the focus then shifts to entitlements and maybe it puts us in a place where we actually can do something that really saves the nation."
Besides getting tax hikes through the Republican-dominated House, Corker's proposal faces another hurdle: Democrats haven't been receptive to GOP proposals on the entitlement programs. Senate Democratic Whip Dick Durbin, D-Ill., on Sunday was skeptical about proposals to increase the eligibility age for Medicare from 65 to 67. He said he doesn't see Congress addressing the complicated issue of Medicare overhaul in the three weeks remaining before the end of the year.
"I just don't think we can do it in a matter of days here before the end of the year," Durbin said. "We need to address that in a thoughtful way through the committee structure after the first of the year."
The clock is ticking to avert the so-called "fiscal cliff," when a combination of automatic tax increases and spending cuts kick in at the beginning of the year. Negotiations are taking place primarily between Obama and the GOP's Boehner, whose party controls the House and comprises mostly hard-line fiscal conservatives who are holding fast to their position.
"No Republican wants to vote for a rate tax increase," said Rep. Jeb Hensarling, R-Texas, chairman of the House Republican Conference.
Added Rep. Marsha Blackburn, R-Tenn.: "I'm not sure there is support for the rate hikes. There is support for revenue by cleaning up the code."
But at least one House Republican has said there is another way. Rep. Tom Cole, of Oklahoma, has said Obama and Boehner should agree not to raise tax rates on the majority of Americans and negotiate the rates for top earners later. Cole said Sunday that most House Republicans would vote for that approach because it doesn't include a rate hike.
"You know, it's not waving a white flag to recognize political reality," Cole said.
Sen. Tom Coburn, R-Okla., already has said he could support higher tax rates on upper incomes as part of a comprehensive plan to cut the federal deficit.
When asked Sunday what it would take to sign on to a tax rate increase, Coburn echoed Corker's comments by responding: "Significant entitlement reform." He quickly added, however, that he has estimated that such a tax rate increase would only affect about 7 percent of the deficit.
"Will I accept a tax increase as a part of a deal to actually solve our problems? Yes," Coburn said. "But the president's negotiating with the wrong people. He needs to be negotiating with our bondholders in China, because if we don't put a credible plan on the discussion, ultimately, we all lose."
Obama's plan would raise $1.6 trillion in revenue over 10 years, partly by letting decade-old tax cuts on the country's highest earners expire at the end of the year. He would continue those Bush-era tax cuts for everyone except individuals earning more than $200,000 and couples making above $250,000. The highest rates on top-paid Americans would rise from 33 percent and 35 percent to 36 percent and 39.6 percent.
Boehner has offered $800 billion in new revenues to be raised by reducing or eliminating unspecified tax breaks on upper-income people. The Republican plan would cut spending by $1.4 trillion, including by trimming annual increases in Social Security payments and raising the eligibility age for Medicare.
Hensarling and Coburn spoke on ABC's "This Week." Blackburn and Cole spoke on CNN's "State of the Union." Durbin spoke on NBC's "Meet the Press."
I remember when Gov. Jerry Brown was running for POTUS in the 1980's, and he said he was running on a flat 10% federal income tax for all people. He had ideas of cutting programs and such. And yes, he was a Democrat at the time.Â
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It seems that the US has engineered a society where Pres. JFK's idea of "Ask not what the country can do for you, but what you can do for your country" has changed to become "Ask not what you can do for your country, but what your country can do for you."
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There are those at the top tier that can put in more tax money to help out the disadvantaged. I understand that.
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Yet, there are the Democrats who are also now in office, and demanding more and more. I believe in helping out our fellow being, but to squash others along the way, to benefit others by having those that make money deliver more than a fair portion to government taxes, just makes me angry that our society has become such a blood-leeching organism, and no one has the guts to stop it.
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We'll never get out of our economic problems this way. Guaranteed. There needs to be a de-cluttering of the government programs, and a major cleaning of the way things are done. But both parties need to be all in, and nothing is held back. Everything needs to be on the table to be looked at to see how things can be improved.Â
When Reagan was POTUS, 81% of wager earners paid income taxes. Today that number is barely over half.
The top 1% is already paying 37% of all personal income taxes paid.... which BTW is more than the wealthy pay in many other countries like France, Sweden, Germany, etc.
the wealthy are already paying their unfair share
If tax rates are to go up...... THEY SHOULD GO UP ON EVERYONE!!!
I, for one, am not very rich; actually far from it. But I would object to being treated differently if I were rich. This is a free country dedicated to the profit motive, not to mention being the best you can be. Why should only "rich" people have their taxes increased? If there is a tax problem, why not just change the tax code to eliminate all the weird deductions that all of us ask out tax advisers about? I would be in favor of a simple tax of whatever percentage that everyone pays, regardless of deductions, etc. Why can't that happen? Are only CPAs and tax accountants going to keep getting rich on the present system? Everyone should have to pay the same percentage without deductions!
A little perspective: President Obama ordered the cabinet to cut $100,000,000.00 ($100 million) from the $3,500,000,000,000.00 ($3.5 trillion) federal budget.
I'm so impressed by this sacrifice that I have decided to do the same thing with my personal budget. Hypothetically, letâs say I spend about $2,000 a month on groceries, household expenses, medicine, utilities, etc., but hey it's time to get out the budget cutting axe, go through my expenses, and cut back.
I'm going to cut my spending at exactly the same ratio (1/35,000) of my total budget. After doing the math, it looks like instead of spending $2,000 a month, I'm going to have to cut that number by six cents. Yes, I'm going to have to get by with $1999.94, but that's what sacrifice is all about.
I'll just have to do without some things, that are, frankly, luxuries - six cents worth.
Did politicians actually think no one would do the math? Please share this so people understand how idiotic a mere $100 million cut is in a $3.5 trillion budget - ludicrous!!!!!!!
Balanced budget - you and I have to do it at home and 49 states have it in their constitutions. Why not the feds?Â
No tax deal without cutting the spending â¦.
 @KHEB The federal government is not a household - that's where this old analysis breaks down every time. You don't print your own currency or regulate a banking system or have 300 million people in your family, so the same rules don't apply.
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Is our debt too high? Yes. Does the government spend money on things it shouldn't? Yes. If we were to create a list of things to cut, you and I would have very different lists, but we would each have a list. But to go from that to saying the federal government should have to balance its budget because you and I have to around our kitchen tables is silly.
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There are times when the government has to do things like save the financial industry or prop up employment with public works spending - that we get into these messes is the problem, not that we spend money to try and get out of them. If the feds had a balanced budget in 2009, we'd be in a full-blown depression right now. It would have been Herbert Hoover all over again.
@Max Quinn However, in order for the government to get the money to provide for those things, it requires us to foot the bill, whether you be rich or poor, old or young. Eventually, the turnip has no more blood left to squeeze.
 @kramr I haven't seen you make the claim about France, Sweden, Germany and others - but it makes sense. Wealth in those countries is more fairly distributed  (the top 1% don't bring in 24% of all the income). So, if you tax income in those countries, the distribution of who's paying will be less dramatic than in the US.Â
@Max Quinn @OSUx2Â """""Average CEO makes 400 times what the average worker does - the turnip ain't dry."""""
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You've heard me say this before, the top 1% pay 37% of all personal income taxes paid. that is already a higher percentage than in countries like France, Sweden, Germany and others.
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how or why is it fair to squeeze so much from so few when there is nearly half the wage earners in America NOT paying ANY TAXES.
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If its a good idea  to crank up the taxes on the wealthy, then its just as much a good idea  to crank up the tax rate on EVERYONE.
 @OSUx2 The top tax bracket used to be 91%. I wouldn't even want to go there.
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The point isn't that some people make money building toys for the very rich - it's that the executive class has sliced a much larger piece of the pie than they have earned and thus have kept a lot of hard working people from getting what they have earned.
 @OSUx2 No.Â
And once you tax the CEO's enough, let's say to flatten everybody's available income to $250k or less, then who are you going to ask for money for projects that don't necessarily need done? At some point, the spenders HAVE to stop, or at least reduce, spending.Â
So what should you tax him at? 50% per haps? At least he won't be spending money on yachts and planes and whatnot. But that's okay, because it's not like any middle or lower income people make those things for him.
 @OSUx2 Average CEO makes 400 times what the average worker does - the turnip ain't dry.
@KHEB .......great analysis. Well done !!