|
The fiscal cliff is a leverage tool, nothing more.
If we go over the cliff the laws can still be changed before the consequences take place.
Going over it and then raising revenue can be called 'lowering taxes' by the Norquist crowd.
There won't be 1.6 in new taxes... But you wouldn't start a negotiation asking for your actual target would you?
Obama has finally learned how to handle opposition without getting paddled.
1.6T is a boogeyman. The cliff is a boogeyman. Riling up voters is a boogeyman.
He is using them effectively to get the deal he actually wants done.
My expectation is a cap on deductions at around 50K (which CBO estimates at 750B revenue), a small raise in taxes of less than the pre-bush tax cut rate on people over 500K (which CBO estimates at 200B revenue) and some cuts in spending (especially military budgets) to drop by an about equal 800B to 1Trillion. That would put 2T a year back in the coffers, allow republicans to save face by technically lowering taxes and allow Obama to claim he used a balanced approach. The deduction cap would hit the same top 2% but would hit people who don't actually pay the marginal rates the hardest. So people who pay 14% on 200M would take a bigger hit than people paying 30% on 200M. I'd also expect some form of the buffet rule to be enacted.
Just 'Asking nicely' won't make any of that happen. Seems Obama has figured that out.
|