Scheme to increase tax revenue by $1 trillion over 10 years
There was some movement in long-stalled talks on avoiding the “fiscal cliff” by the end of the year, as the House of Representatives Speaker John Boehner offered to be flexible on raising taxes on some wealthy earners, though not as many as President Barack Obama wants, and only in exchange for cuts to popular benefit programmes cherished by Democrats.
Tax rates on all workers go up when Bush-era cuts expire in January, and $109 billion worth of automatic across-the-board spending cuts begin to take effect then as well. This combination of austerity steps threatens to send the U.S. economy back into recession.
On Friday the Speaker offered $1 trillion in higher tax revenue over 10 years and an increase in the top tax rate on people making more than $1 million a year.
He’s also offering a large enough extension in the federal government’s borrowing cap to fund it for one year before the issue is revisited, conditioned on Mr. Obama agreeing to the $1 trillion in spending cuts.