Economy & Budget

Obama White House Talks Hardest Tax-Hike Line Yet

Obama White House Talks Hardest Tax-Hike Line Yet

In terms that are easily the toughest-sounding it has so far uttered on the subject, the White House today insisted again that taxes “have to go up on millionaires and billionaires” and that the President “will not sign an extension” of present tax rates for the top two per cent of wage-earners (who are not all “millionaires and billionaires”).

Although the Obama Administration has made it clear for sometime now that an increase in tax rates on the highest wage-earners was a non-negotiable part of any deal to avoid the “fiscal cliff,” Press Secretary Jay Carney used his strongest language yet on this point today. Some of my colleagues at today’s White House briefing speculated that Carney was doing so to make sure that Republicans were not influenced by Mr. Obama’s reported openness to a deal without a tax increase during his recent meeting with the nation’s governors.

House Speaker John Boehner (R-Ohio) and other Republicans have no recognition, Carney said, of the “fundamental fact” that a deal without a tax increase “is no deal.” Insisting that deficit reduction will not come about through “promised loopholes” and “capping of deductions,” Carney added that only a deal with a tax increase on the top two wage-earners was “mathematically sound.”

“We need to see from Republicans a recognition” of that, he added.

The President’s top spokesman also took issue with the findings of a private panel of bipartisan experts that the U.S. can avoid a rate increase and still reduce the deficit. Noting that such a solution would involve ending or capping many charitable deductions, Carney concluded that it would be unfair to middle class taxpayers and difficult to explain to major charities.

“No outside economist has said you can achieve credible deficit reduction by closing loopholes and capping deductions, insisted Carney. (The panel that reached the findings in question included former Council of Economic Advisors Chairman Laura D’Andrea Tyson and former Office of Management and Budget head Alice Rivlin, both of whom the President has spoken of with admiration in the past).

As to criticism from Republicans that the White House has yet to offer a plan on spending cuts and dealing with entitlements, Carney said again: “There is no deal to be had on the spending side without acceptance of Republican leaders” that the rates will go up.

There were a handful of questions on Syria but it was clear that the focus of today’s briefing–and the White House itself–is whether tax rates will be raised. One can expect a lot more of this in the days and weeks ahead.

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