Democrats, led by President Barack Obama, want lawmakers
to consider a fresh set of tax increases in the next several weeks when
they discuss whether to cut spending.
Republicans oppose raising
tax rates, especially after they just raised some of them for the first
time in two decades in the New Year’s deal that extended most – but not
all – of the expiring Bush tax cuts.
But much of what Obama is talking about is raising tax revenue
without actually raising tax rates. In Washington-speak, lawmakers will
try to collect more tax money by closing tax loopholes, perhaps limiting
popular tax deductions and to some degree changing the way citizens pay
into the popular Medicare and Social Security programs.
One Democrat idea would be to limit how much mortgage interest, state taxes or
charitable giving can be deducted from taxes by high-income earners. The
New Year’s deal started phasing out some of the tax exemptions claimed
by high-income earners and limiting their tax deductions. This could
gain in popularity because tax rates remain unchanged and middle-income
Americans would not be affected.
A bipartisan presidential
commission in 2010 favored scaling back mortgage-interest deductions, in
part because they effectively subsidize the wealthy by offering them a
bigger discount off a higher tax rate. The problem is that rolling this
program back is fraught with risk in today’s impaired housing market.
Read More: McClatchy
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Read more here: http://www.mcclatchydc.com/2013/01/09/179447/as-new-fiscal-crises-near-democrats.html#storylink=cpy
