Obama Demands $1.6 Trillion More In Taxes

Posted by Adam English on the Wealth Wire – Wednesday, November 14th, 2012

President Obama will begin budget negotiations on Friday morning but moving twice as far away from Republican interests. Instead of the $800 billion in extra federal revenue from tax hikes,Obama will be calling for a whopping $1.6 trillion.

On the other side of the table, House Speaker John Boehner hasn’t specified a revenue target, but he has said he would be willing to accept new tax revenues. He is still unwilling to consider higher tax rates.

As a condition for the possible concession, Boehner continues to insist that Democrats accept structural changes to entitlement programs which are causing long-term budget concerns.

President Obama just attended a meeting with union officials and other activists and will be meeting with CEOs of a dozen companies today. Many executives have already voiced grave concerns about the consequences of the looming standoff over the fiscal cliff.

73% of participants of a Wall Street Journal CEO conference earlier this week said their primary concern was the fiscal cliff.

One conference participant, David Crane, CEO of NRG Energy Inc., said, “I think everyone just has this fear that they just do as they’ve done the last four years and just lob grenades at each other.”

In the recent election, Democrats picked up two additional Senate seats and six additional House seats. Coupled with the reelection of President Obama, the entrenchment of Democrats in the legislature has emboldened their demands.

For example, Senate Majority Leader Harry Reid showed little interest in concessions and affirmed President Obama’s demand that the House pass a Senate-approved bill extending current tax rates for middle-income taxpayers, but not for the wealthiest 2% of taxpayers.

Unfortunately, President Obama and Democratic leaders have not clarified how they would potentially raise the $1.6 trillion in revenue.

While letting the Bush-era tax rates expire would raise up to $823 billion according to the Congressional Budget Office, the other $800 billion would inevitably have to come from popular programs such as Medicare, Social Security or defense spending.

More here: http://www.wealthwire.com/news/economy/4162?r=1