You've got to give House Speaker John Boehner credit. He's united a diverse group of lawmakers, lobbyists and policy groups in their disdain for his fiscal cliff Plan B solution.
House Speaker John Boehner making a fiscal cliff point on the House floor, Dec. 13, 2012.
Photo courtesy the Speaker's office.
So what's got folks shaking their heads? Among the proposals highlighted on the Speaker's web page are:
- Permanently extend the current income tax rates — 10 percent to 35 percent — for everyone making less than $1 million; for millionaires and more, the top rate would be the 39.6 percent Obama wants;
- Increase for the 2012 tax year the alternative minimum tax (AMT) exemption amounts to $78,750 for joint filers and $50,600 for single taxpayers and then having the parallel tax exemption amounts indexed for inflation beginning in 2013;
- Continue the current estate, gift and generation-skipping transfer
tax provisions at a 35 percent maximum rate and a $5 million estate exemption amount; - Raise the capital gains and qualified dividends tax on millionaires+ to a maximum 20 percent but keep the 15 percent tax rate on those investment earnings for other taxpayers;
- Retain the $1,000 child's tax credit;
- Permanently extend the $250,000 level for small business Section 179 expensing.
A lot of things to like in there, right? Not so fast say various groups.
Howard Gleckman, writing at the Tax Policy Center's blog TaxVox, says:
For his part, the speaker has taken an even stranger turn by going rogue
with his Plan B. He'd raise taxes on those making $1 million or more,
who account for only about 0.2 percent of households. And he'd raise
taxes on those making $50,000 or less. The result: Working families
would help cover some of the revenue that's lost from protecting those
making between $200,000 and $1 million.
Robert Franks, editor of CNBC's Inside Wealth, also examined the TPC figures and notes that despite the claim by Boehner's GOP leadership colleague Eric Cantor that Plan B would raise revenue "without hurting many small businesses" or taxpayers, taxpayers at almost everyone income level would face tax increases.
The Tax Foundation isn't that fond of Plan B either. In addition to citing the tax increases on most taxpayers, the group notes that Boehner's proposal won't do much to help reduce the debt:
But, as the
president has noted, there just isn't enough money there to make much of
a dent. For instance, if all of the income of millionaires were
confiscated, it would only cover about 60 percent of this year's
deficit. And after doing that, millionaires would disappear completely.
Still, the Speaker is hopeful that he can convince enough Representatives to vote for Plan B.
But that then raises the question, why?
Senate Majority Leader Harry Reid has made it clear that Plan B, if passed by the House, won't get any attention on the other side of Capitol Hill.
Because the Speaker wants to show the hard-right flank of his party that he's doing all he can to fend off the Obama tax hikes on folks at the $200,000 single filer/$250,000 families levels.
Plus, he wants something on the record that the GOP can point to when members are asked why they didn't keep the country from falling off the fiscal cliff. Public opinion poll after polls shows that most Americans will blame Republicans more if no agreement is reached.
And maybe, just maybe, after this latest dog and pony show, lawmakers will then get back to trying to reach a deal that has a chance of making it all the way through the legislative process.
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