Higher taxes have been missing from the fierce budget battle that nearly shut down the federal government. But President Barack Obama is about to put them on the table – at least a modest version that he had pushed before and then rested on the shelf.
Most economists and budget analysts say a comprehensive mix of spending cuts and tax increases is essential to any viable deficit-reduction plan. Yet few players in the negotiations have gone there.
It comes in the scramble to heed what is widely viewed as a loud clamor from voters to slam the brakes on runaway government spending. There has been no corresponding public demand for raising taxes. That's not surprising, but the top-bracket U.S. tax rate now is the lowest it's been in decades, and it's far lower than those in many other industrialized countries, especially in western Europe.
Tax elements of Obama's broad deficit-reduction plan, to be laid out in a speech Wednesday, seem likely to revive his earlier proposals.
The president is expected to bring back his recommendation, first made in the 2008 campaign, to end Bush-era tax cuts for households earning over $250,000 a year. He temporarily set it aside when he signed onto a late 2010 agreement with Republicans to extend all Bush tax cuts for two years.
However, he did renew the bid earlier this year in his budget for the 2012 fiscal year that begins Oct.
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