The White House is pushing for some tax increases on the wealthy or the elimination of tax breaks for big companies and wealthy individuals as part of a deficit-cutting plan. During the Biden-led negotiations, Democrats proposed about $400 billion in additional tax revenue, including ending subsidies to oil and gas companies, an idea that has failed previously in the Senate.
The administration also would tax private equity or hedge fund managers at higher income tax rates instead of lower capital gains rates, change the depreciation formula on corporate jets, and limit itemized deductions for wealthy taxpayers. It also has called for repealing a tax benefit for an inventory accounting practice used by many manufacturers.
All in all, Obama has proposed more than $600 billion in tax increases and would like a ratio of $1 in tax revenue for every $3 in spending reductions.
"At the end of the day I would be surprised if it was that 1-to-3 ratio the White House was talking about," said Chris Krueger, a policy and politics analyst at MF Global's Washington Research Group. "That is probably a bridge too far for congressional Republicans. But I wouldn't be surprised if there a couple of ceremonial revenue raisers."
While Republicans insist on no tax increases, they have been willing to consider other forms of revenue, particularly higher user fees.
"Revenues have never been off the table," said Sen. Jon Kyl of Arizona, the Senate's Republican participant in the Biden talks. "There are some user fees that are probably way low compared to when they were originally set."
Obama's budget wants $85 billion in new fees over 10 years, including raising the airline passenger security fee from a maximum of $5 per one-way trip to $11. Other proposals range from Food and Drug Administration food inspection fees to duck hunting fees. The $85 billion includes a federal auction of parts of the broadcast spectrum and the sale of surplus federal property.
Complicating matters is the congressional schedule. While the Senate is in session, the House is off this week ahead of the July 4 holiday. The House is scheduled to return next week when the Senate will be away. That makes it difficult for leaders in both chambers to find consensus among their respective memberships.
"It's a really delicate balance and there is not a lot of time left," Krueger said.
Associated Press writer Andrew Taylor contributed to this report.
- In Disney World's shadow, homeless families...
- Herbert: Embattled Nevada rancher 'not the...
- Gas explosion forces Wyoming town to evacuate
- Student debt holds back many would-be home...
- Justin Bieber apologizes for Japan war shrine...
- Costa Rica is demanding US explain 'Cuban...
- Sherpas leave Everest; some expeditions nix...
- FDA proposes first regulations for e-cigarettes
- Supreme Court upholds Michigan's... 27
- Affordable Care Act only chips away at... 26
- Judge: Indiana hasn't given valid... 23
- Grieving borrowers told to repay... 20
- Vegas’ water drying up 15
- Boogeymen and shady deals define spin... 13
- Herbert: Embattled Nevada rancher 'not... 13
- Public smoke-out marks pot holiday in... 12