Boehner says debt limit should be part of talks

House Speaker John Boehner insisted on Friday that any deal with President Barack Obama to avert the so-called fiscal cliff must include lower tax rates, eliminating special interest loopholes and reining in government-benefit programs.
Associated Press
Nov 10, 2012

"2013 should be the year we begin to solve our debt through tax reform and entitlement reform," Boehner said.

Boehner and Obama have taken the initial steps in high-stakes negotiations over how to deal with expiring Bush-era tax cuts and automatic spending cuts to defense and domestic programs that economists warn could plunge the nation into another recession.

Boehner, Obama and Senate leaders face a Jan. 2 deadline to reach an agreement or at least come up with a framework to deal with the issue early next year.

Boehner expressed a degree of optimism about resolving the issues and ensuring that his sometimes reluctant GOP rank and file will back any deal.

"When the president and I have come to an agreement, there's been no problem getting it passed in the House," Boehner said.

The speaker declined to discuss specifics on deficit targets or what tax loopholes to eliminate though he cited both corporate and individual.

"I don't want to box myself in. I don't want to box anyone else in," he said.

Boehner indicated that increasing the nation's borrowing authority, which was a divisive issue in August 2011 talks, should be part of any talks in the coming weeks on avoiding the fiscal cliff. The government has said the nation won't reach the debt limit until the spring.

"It's an issue that's going to have to be addressed, sooner rather than later," he said.

Boehner said he had a brief, cordial conversation with Obama earlier in the week and reiterated that the president needs to lead on the negotiations.

Democrats have resisted including entitlement programs such as Medicare and Social Security in any deficit-cutting deal. Senate Majority Leader Harry Reid, D-Nev., said earlier this week they were unwilling to make changes in Social Security.

Boehner insisted that the programs need to be on the table.

"It's not like there is money in Social Security and Medicare" trust fund, Boehner said. "This has to be dealt with."

The Ohio Republican, reflecting the sentiment of his caucus, said increasing the maximum 35 percent tax rate on high-income earners cannot be part of the deal. Boehner did signal that he was open to eliminating loopholes.

"The problem with raising tax rates on wealthy Americans is that more than half of them are small business owners," Boehner said. "Raising tax rates will slow down our ability to create the jobs that everyone says they want."

The Republican leader acknowledged that his party faces several roadblocks after Obama won a second term and the GOP lost seats in both the House and the Senate.

"It's clear that as a political party we've got some work to do," he said.

Republicans fared poorly with Hispanic voters. The fastest growing minority group went heavily for Democrats, backing Obama by more than 70 percent. Boehner signaled a willingness to tackle immigration legislation next year.

"What I'm talking about is a common sense, step-by-step approach, would secure our borders, allow us to enforce the laws, and fix a broken immigration system," he said. "But again on an issue this big, the president has to lead."

 

Comments

2cents

Boehner said "The problem with raising tax rates on wealthy Americans is that more than half of them are small business owners,"

I was in Chicago this week meeting with a vendor; he is 63 and owns a small business he bought 15 years ago. The business was doing well; he employs about 15 people and makes stamped metal parts. He like most others is taxed at about 35% but in reality when you add up all the taxes like I did, including property tax, state taxes, matching employer contributions and others the current taxes paid by small business owners like myself is more like 51-54%.

His comment was that if I have to pay much more it is just not worth the headache! We are not talking 51% of a bazillion dollars but more like $200K. How would you like to look at your payroll stub after making $500.00 and see the bottom line of $250.00 take home? I know what it is like; I lived out of a budget book many years ago. Remember this guy was not talking about selling his business, he said he would just lock the doors and auction off the equipment. Now there are 15 people out of work! Entrepreneurs take the risk; invest in things that may not fly, have many sleepless nights, have the desire to make their lives better with hard work over and above the norm. Votes for Mitt Romney were not votes for the man but votes for policy. Our current president is very anti middle class and these are the people who fall into the middle class.

There is a lot that can be done to raise revenue and reduce spending without hitting the middle class with taxes. I would like to see a range of what these polititions call middle class income?

Just saying!

Bluto

That ratio is the REAL middle class's reality . 51% is about right in real world terms . If you are doing better then that you are probably not middle class .

2cents

Bluto,
Here is a nice basic link for income. One thing you fail to understand is the risk some people choose take to make a higher income. There is no time clock, there is no pay check, there are plenty of regulations though and they take their work home, in a brief case or in their mind. Spreading their achievement re, income, will only reduce others desire to work harder to gain it. When that desire to create small businesses is reduced then the possibility of them employing people follows. This heads us toward a socialist society.

http://www.mybudget360.com/how-m...

verdict

A Socialist Dictatorship, inevitably. There is no other way for Socialism to work, except by Dictatorship.

Bluto

I understand just fine . My point is that business owners are not the only people that work hard and strive to get ahead in life . There are many people who have jobs that require plenty of time and investment in order to make a good living . Non-business owners pay for things out of pocket too . Like fuel , tools , vehicles , uniforms , etc. , All the while paying taxes on said expenses . The big difference is that non-business owners don't always get to take advantage of the tax loopholes that the rich have had access to forever . The working class supports the business owners just as much as business supports workers . All anyone wants is for them to pay their fair share . We are all sticking our necks out there trying to make a better life for our families . Like you said running a business is a risky venture , but that doesn't entitle them to preferential treatment .

Contango

@ 2cents:

From my reading, lots of sm. biz owners are cashin' in due to the anticipation of higher fed taxes on cap gains.

Looks like a race for the exits in some cases.

With the likelihood of higher taxes and increased regulation, entrepreneurship looks to be on the critical list.

Why would anyone in his or her right mind want to start a business?

mikel

2cents, good post. many people think that the small business owners are flush with cash. but, like you said not only do we pay property taxes on our homes we also pay them on our shop buildings. we are doubled up on all utilities etc.

it is always easier to spend someone else's money.

John Harville

"Small Business Owners" - the great unwashed melting pot into which everyone likes to toss anyone who wants to complain about the burden of taxes and regulations.
Many 'small businesses' don't file business taxes, instead taking it as part of personal income taxes.
'small business' is minimum 50 employees for ACA.
Small business is 500-500 employees.
while a 'business' with 15 employees - or five or two - is 'small' it is not recognized as a small business.
"Entrepreneurs take the risk"... often unadvisedly or against professional counseling (if they even bother to get such advice/counseling) and thus are not aware of the pitfalls.

coasterfan

More baloney from Boehner. 98% of small business owners earn less than $250,000 a year, and wouldn't be affected by the tax increases on the wealthy that Obama is proposing.

KnuckleDragger

Look for this to be more of the same. The President and Boehner will strike a deal, it will pass the house, and move on to the Senate. Harry Reid will get ahold of it, and either refuse to take action on it in the Senate or completely rewrite it, send it back to the house where it will be voted down, and then Reid will blame it on the Republicans. This is what we have to look forward to because the Dems don't care about solving this, they care about gaining control of the house in 2 yrs. Because of this, look forward to them obstructing any attempt to fix this mess. It's business as usual for Reid and the Democrat controlled Senate.

John Harville

KD... One big difference this time... Congress will take the heat and have to face the electorate in two years. The president and Dems can let it go over the cliff and let all the cuts the Repubs insisted on last happen - major cuts, major revisions.
Then the new - much more Democrat - House and Senate and 'invulnerable' president can set about 'rescuing' the nation, reverse the 2012 Repubican cuts to defense and save the ocuntry BEFORE those cuts have a chance to take effect.
Of course they won't revive the Bush cuts but will set a tax revenue plan that will exact taxes from the wealthy.
$300 million spent to buy a presidency and Senate just didn't work out for the Kocks, Adelman, Rove and others and now they have to bite the bullet and 'enjoy' the redistribution of their wealth to a lot of media moguls who sold all that awful advertising.
Happy Days are here again!!!

2cents

The link is a good read!

(Four years ago, Obama attempted to break with the past by trying to treat China as a partner in solving global issues: the Great Recession, climate change and nuclear proliferation. He was rebuffed by Beijing, which took the overture as a sign of declining American power)

http://www.huffingtonpost.com/hu...

Kimo

Re: "sign of declining American power".

IMO
When you go to China looking for them to invest in your city: that is a "sign of declining American power".

America begging for Chinese money sureashell don't look like a "super power" to me.

Cut benefits? How about Boehner starts with "his benefits".

KnuckleDragger

LMAO!!! You know better than that. There isn't a single politician in office at the Federal level that would take a cut in their pay and benefits. Keep dreamin'. Pay raises and increased benefits for themselves are about the only thing all of these politicians can agree on :)

sanduskysteve

I still don't consider someone making 200,000 middle class - that was Romney's description of the middle class. The average income in this country is 50,000 - that would be middle class and there are too many who make less than that even. The real rich though are those making a million or more. I really am supposed to feel sorry for them only getting to keep 500,000 of their money??? I surely don't. Maybe they could do with only one yacht rather than 4. Fix this problem with HR25 which no republican has ever wanted to happen - then it will be more fair to everyone involved.

Also, curious about what the guy making 200,000 is paying those 15 employees. I would guess not even 10 bucks an hour. The information would be interesting though. Does this employer pay their health insurance?

KnuckleDragger

LOL. Romney's description? Obama has been touting around the $250K and below number as middle class for as long as he has been president. Do I really have to post links to all of his speeches where he mentions it?

Contango

@ sanduskysteve:

Yachts?

Maybe the Dems should re-new the luxury tax on expensive cars, jewelry and yachts?

Maybe they can try for another few thousand working people losing their jobs and hundreds of businesses closing?

When ya tax the rich, the "little people" who make the goods that the rich tend to buy end up being the only ones who suffer.

http://answers.yahoo.com/questio...

2cents

Contango, you are correct. My company did build a part that went on Tiara yachts as well as a part that went into a Monaco motor coach The price tag of a Monaco was a about $1,000.000.00. Both parts have been yanked by a big customer and moved to China for assembly, our part cost to them was $5.50 and China was $2.50. Until this year I have never laid off anyone permanently!

John Harville

Contango... the cuts will weed out the small businesses who shouldn't be in business.
And whatever happens will lie at the door of the Republican House of Representatives. As Sen. Patty Murray said, if December 31 comes and all the automatic cuts the Republicans 'compromised' to in 2011 happen - it will just be a good lesson for the country. Come January 3 when the new Congress is sworn with a decidedly darker complexion and more feminine outlook, the Democrats merely enact laws the President signs and the Tea Party and Norquist Republicans will have to remember November 2014 comes quickly.

8ballinthesidepocket

I would love to see what you would do if you got off your behind, got educated, started a business with every cent you had, and finally after about ten years of struggling the business took off and you started making big money. You would be in the conga line nay saying taxes on you. It so easy to sit on your duff, do nothing and bad mouth the successful..typical lazy liberal dogma.

John Harville

8ball.... did you go into your business knowing it could be 10 years before takeoff? Were you financed well enough to wait 10 years? Too many don't bother to create business plans, work with counselors, accept the reality of working in a deficit for several years, have sufficient capitalization (every cent you had might not be enough), and even be willing to borrow more and more and still work in 'the hole'. Why is it everyone who becomes a success is like a smoker who quit or overweight person who lost a lot of weight and now knows all there is to know?
I know a lot of liberals who own successful businesses, find ways to provide benefits, actually have full-time employees (not part-timers who don't get benefits), planned for the lean years and knew from the beginning about budgeting.
Namecalling is the last resort of losers who have no other argument.

JACKEL

I am glad you cleared that up,I kept asking everyone,Who in the hell,do you Multi Millionaires consider middle class'?I guess the Congress is all Multi Millionaires except The Idiot Biden!He may be by now as well !

verdict

@sanduskysteve Is this 200k gross income or net income?
If it is gross income (which it probably is, since gross income is what gets taxed and the net income is what you are left with), he could not afford to even pay the employees $10/hr, let alone the operating costs and taxes.
15 employees x $10/hr. x 40 hrs/wk. x 52 wks/yr. = 312k. THEN we can start on the taxes and operating costs.

KnuckleDragger

The $200K is likely gross income, which is computed different for a business. The taxable income for a business owner is the income he/she has made after expenses which include wages and benefits to employees. This isn't rocket science folks.

John Harville

Verdict. Look around. How many such businesses do you see paying for 40 hrs/week? Virtually none... cuz then they don't have to provide any sort of benefits short of payroll taxes. I worked in a small business. It's cheaper to have 10 20hr/wk employees than five 40hr/week employees. The owner of the business where I worked lived a comfortable lifestyle with nice house, two cars, boat and vacations - and still took a write-off every year on his taxes.

DGMutley

sanduskysteve,

Who knows if the employer is paying their health insurance? You can betcha though the employer is paying his own health insurance through the business.

Anyone curious about how the income is taxed just download the Schedule C pdf and look at it. The owner is taxed on his $200,000 after all expenses. In other words, at this point his income is no different than any other professional person making $200,000.

Footnote: We keep hearing about the taxes being raised on small business but that isn't true the taxes are being raised on the _owner_ of the small business after all expenses are paid.

John Harville

And let's not forget the great LLC - Limited Liability Corporation - which holds all the homes, cars, property etc. and pays all the mortgages while the owner merely pays the LLC, thereby LIMITing his LIABILITY for tax.

mikel

mutley, when a business has a group health plan it must be for more than 1 person. then either all employees are on or they must opt out. so, having an llc myself you are both right and wrong about the taxes being raised on the business vs the owner.

my building is titled to the llc. the llc pays the property taxes. also the llc pays the sales tax for equipment as well as taxes on utilities and fuel. at the end of the day it comes out of my llc checking account. most business's just don't throw it all into one bag and shake it out.

Pastor Ron

Maybe he should hire Romney's accountant and then probably pay less than 14 percent?

8ballinthesidepocket

Did Romney break any laws? He paid over 2.0 million in taxes, donated another 2.0 million to charities, now what did you do in those terms? I know "it's not fair!" Wah wah wah wah. Do you know what tax rate Warren Buffett paid? George Soros? Bill Gates? Steven Speilberg? Read up on Obama's buddy Spielberg and how he is trying spin off part if his holdings before year end so he saves 2.0 million in taxes..now that doesn't sound very patriotic does it?

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