White House: No Budget Deal Without More Tax Increases

White House: No Budget Deal Without More Tax Increases

President Barack Obama’s budget has $580 billion in proposed tax increases, and the White House said Obama would not agree to any budget deal that does not include tax increases. 

“If they refuse to include revenues in any deal, then there will be no deal. It’s that simple,” a senior White House official said on Tuesday when speaking about Republicans and the budget. 

In the deal to temporarily avert the so-called fiscal cliff, Republicans agreed to $600 billion in tax increases; Obama’s budget proposal has even more. 

The Obama budget, which was submitted nearly two months late, proposes instituting the “Buffett Rule”; everyone earning over $1 million would pay at least 30% in taxes, which Obama has deemed their “fair share.”

Obama’s budget also limits the “value of itemized deductions and exclusions for high-income households,” by capping the top rate at 28%. As CNN notes, someone in the 39.6% bracket would save $39.60 on a $100 deduction under current tax law; however, that same person would only save $28 on a $100 donation under Obama’s proposal.

Obama’s budget also proposes to cap Individual Retirement Accounts (IRAs) at $3 million, because the new “account balance threshold would be based on what could finance an annuity of $205,000 a year in retirement,” which is the amount the administration has deemed is “reasonable” for retirement. 

Finally, Obama would tax carried interest as regular income, which would mean “fund managers could pay a rate as high as 39.6%, or more than 2.5 times the rate they pay now.”

According to Politico, White House officials believe their determination to not agree to any deal that does not include new tax increases is justified because “Obama won a second term in November, and he’s not interested in negotiating away from the positions he took on the campaign trail to” win.