Once again, President Obama dodged the key fiscal-cliff issues at a campaign rally/press conference Wednesday morning. Campaign-style, he argued that the middle-class tax cuts (below $250,000) must be renewed in order to prevent a $2,200 average tax hike from hitting middle-class folks. He added that a middle-class tax hike would cost consumers $200 billion in spending power.
Okay, fine. But no one wants to raise middle-class taxes. That’s not the issue. And even if those numbers are right, they dodge one of the key points in the dialogue between President Obama and House Speaker John Boehner. Namely, what to do about top income-tax rates, which include capital gains, dividends, and inheritance taxes?
The president once again avoided the term “tax rate” in his latest round of fiscal-cliff comments. He basically said, Let’s get this done before Christmas in a fair and balanced way. But what is balance?
Speaker Boehner, in a Republican concession, is willing to cap upper-end deductions, a move that would produce several hundred billion dollars in new revenues while preserving marginal-tax-rate growth incentives, including those for successful small-business owners.
Obama did refer to a Senate Democratic bill that would raise top tax rates while leaving everything else in place. Question is, is Obama rebuffing the Boehner offer? That’s key to a fiscal-cliff deal. Higher tax rates? Or revenue-producing tax-deduction caps?
Read More at realclearmarkets.com . By Larry Kudlow.