President Barack Obama’s insistence on higher taxes for top earners and Republicans’ refusal to raise rates leaves negotiators with arithmetically complex and politically fraught choices.
Tax questions will be central today when Obama holds his first face-to-face conversation with House Speaker John Boehner since the Nov. 6 election. At the White House meeting on the so-called fiscal cliff, Obama also will host House Minority Leader Nancy Pelosi, a California Democrat, Senate Majority Leader Harry Reid, a Nevada Democrat, and Senate Minority Leader Mitch McConnell, a Kentucky Republican.
Today’s meeting features the same actors who failed to reach agreement in 2011. It won’t be the start of back-to-back meetings. Obama leaves for Asia tomorrow and Congress is departing Washington until Nov. 26 for a Thanksgiving recess.
For example, capping itemized deductions at $50,000 would raise $749 billion over the next decade, according to the nonpartisan Tax Policy Center. That would drop to $490 billion if charitable contributions don’t count toward the cap.
“The guys at the top, they’re going to come out ahead, unless they were being very generous to charity,” Shaviro said.
At the same time, Obama and other Democrats say the math wouldn’t add up in an approach that relied only on reducing tax breaks, and some congressional Democrats say they want the top rates to revert to the Clinton-era levels.