Boehner Reported to Offer Millionaire Tax Rate Increase
Speaker John A. Boehner has offered to let tax rates rise on income over $1 million in return for entitlement changes in fiscal cliff negotiations with President Barack Obama, according to news reports.
The offer is the first time the Ohio Republican has agreed to allow a rate increase, signaling that talks aimed at heading off the tax increases and automatic spending cuts due to take effect at the start of next year were picking up steam. Boehner reportedly made the offer Friday in a phone conversation increase for higher earners in exchange for significant cuts in entitlement programs.
Boehner’s office, the White House and other congressional sources declined to comment, but spokesmen for the Speaker did not deny the offer had been made.
“The lines of communication remain open, but there is no agreement, nor is one imminent,” Boehner spokesman Michael Steel said.
“We’re certainly not going to comment on rumors,” said Brendan Buck, another spokesman for Boehner.
The offer was first reported by Politico and later by The Associated Press and Reuters, citing anonymous sources.
Boehner up until now has insisted that any deal prevent any increase in tax rates for the wealthy; Obama has made higher tax rates a key demand and has vowed to block any fiscal cliff deal that does not let tax rates for the wealthy rise. Obama has drawn the line at the top two tax brackets, which would allow rates to rise for individuals reporting income of $200,000 and families with income of at least $250,000, but the White House has signaled it is willing to let the rates rise short of the 39.6 percent due to take effect for the top earners.
Many Republicans, including Senate Minority Leader Mitch McConnell, R-Ky., have noted tax rates will go back up on Jan. 1 even without action, limiting the GOP’s leverage.
Although it is unknown exactly what Boehner proposed, raising rates on taxpayers who earn more than $1 million could raise $400 billion over a decade, the Congressional Research Service estimated in July. That’s about half of what would be raised under Obama’s demand.
Boehner had previously offered $800 billion in revenue from the wealthy, but only by shrinking deductions and other tax breaks, not with rate increases. The new offer would push the revenue to something closer to $1 trillion over a decade. Obama’s latest offer was $1.4 trillion, down from $1.6 trillion in his initial ask.
A millionaire’s tax would also align Boehner at least rhetorically with positions that have been advocated earlier this year by the No. 3 Senate Democrat, Charles E. Schumer of New York, and House Minority Leader Nancy Pelosi, D-Calif.
Paul Krawzak and Daniel Newhauser contributed to this report.