If there's a deal it will be a compromise, but I will be surprised if it does not include the rate hike to 39.6. If you don't do that, it's very hard to find other changes that make the distribution tables show some equivalent tax increase for the fabled top two percent. Obama has fenced himself in on taxes, limiting increases to a very small group. (Increases, by the way, offset by continued reductions on infra-marginal incomes of the rich below $250K)
One tantalizing issue is the fuzziness about 'income.' If we take the $250K mark to be gross income, that implies potential tax increases (cancellation of the Bush tax cuts) on taxable income (e.g., after exemptions and deductions) at much lower levels, and more dough for the Gov. But I reiterate the calendar 2013 tax piece of any deal will be small in relation to next year's deficit, surely under $200 billion (a big tax increase by normal standards), probably under $150B. The FY2012 deficit was $1.1 trillion. On Fri, Nov 16, 2012 at 8:57 AM, Marv Gandall > > Really? Everything I'm reading suggests an emerging compromise on taxes > which would limit deductions, including for mortgage interest. It would > allow the Republicans to claim they blocked an increase in the tax rate, > while Obama could tout the limit on tax expenditures as tantamount to a tax > hike on the rich who would be the most affected by it. Romney talked u > "closing loopholes" during the campaign, and Obama went out of his way at > his press conference to say he's open to ways other than a tax hike to > raise revenue. Seems to me a tax deal of this sort would clear the way > politically for deep spending cuts - a cheap price to pay for which is what > the political and corporate establishment is really after - while providing > some offsetting budgetary cat food to prevent the complete fiscal > starvation of the public sector, no? > >
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