“I don’t see where Boehner has anything to lose; he should play the game of chicken. . . “
My prediction. Boehner compromises. Income tax rates for those at $250K and above will revert to the pre Bush tax cut rates or higher. The return to previous payroll tax rates will stand. Spending cuts will be reduced and pushed to future years. Extended unemployment benefits will be allowed to expire. All of the Obamacare tax increases will be preserved.
During early 2013 Obama and the Dems will propose numerous new spending bills and comprehensive immigration reform. The House will reject immigration reform as Obama expects. Obama will then use his pardon power to declare a general amnesty for illegals and dream up some executive authority to decree a fast track pathway for citizenship thereby guaranteeing millions of new Dem voters for the 2016 elections. He and the press will demagogue Republicans for not approving all of the job creating new social welfare spending he is creating. This will be used to deflect attention from the worsening unemployment rate which will of course be blamed on Congress not passing his spending plans. By mid to late 2013 the unemployment rate will be back over 10% and the Republicans will feel they have to compromise and provide new stimulus spending.
Meanwhile tax receipts will be dropping as the economy shrinks and fewer people are working or paying taxes. Obama will propose comprehensive tax reform taking millions off the tax rolls at the bottom end, reducing rates for the middle tier, raising rates again for the upper income groups, phasing out all deductions for the upper income group, and cutting 2% from the payroll tax. This fairness reform will include a small VAT of 1-2% plus a small tax on IRA’s, 401K’s and pension plans of the upper income group. He might even include a millionaire’s asset tax of 1-2% on financial assets owned over $1 million in the name of fairness. The United Nations financial transaction tax might also be buried in this bill. Finally, he might try to put some kind of carbon tax on utilities and refineries in this bill.
The fall will be all about Obama’s tax reform. It will be popular with the middle class and lower classes who will gain and not perceive the VAT to be significant and won’t perceive the asset tax as ultimately applying to them. Republicans will fight at first and face a media firestorm calling them the protectors of the rich. Eventually they will fold and the Democrats will have both a political victory and a stealth tax system in place (VAT, asset tax, IRA tax, financial transaction tax) they can increase every time they want additional revenue.
Based on the experience of the past 2 years, I have every reason to believe Boehner will compromise and Obama will end up with the winning hand. He is a deal maker, not a principled and courageous statesman.
My prediction. Boehner compromises. Income tax rates for those at $250K and above will revert to the pre Bush tax cut rates or higher. The return to previous payroll tax rates will stand. Spending cuts will be reduced and pushed to future years. Extended unemployment benefits will be allowed to expire. All of the Obamacare tax increases will be preserved.
During early 2013 Obama and the Dems will propose numerous new spending bills and comprehensive immigration reform. The House will reject immigration reform as Obama expects. Obama will then use his pardon power to declare a general amnesty for illegals and dream up some executive authority to decree a fast track pathway for citizenship thereby guaranteeing millions of new Dem voters for the 2016 elections. He and the press will demagogue Republicans for not approving all of the job creating new social welfare spending he is creating. This will be used to deflect attention from the worsening unemployment rate which will of course be blamed on Congress not passing his spending plans. By mid to late 2013 the unemployment rate will be back over 10% and the Republicans will feel they have to compromise and provide new stimulus spending.
Meanwhile tax receipts will be dropping as the economy shrinks and fewer people are working or paying taxes. Obama will propose comprehensive tax reform taking millions off the tax rolls at the bottom end, reducing rates for the middle tier, raising rates again for the upper income groups, phasing out all deductions for the upper income group, and cutting 2% from the payroll tax. This fairness reform will include a small VAT of 1-2% plus a small tax on IRA’s, 401K’s and pension plans of the upper income group. He might even include a millionaire’s asset tax of 1-2% on financial assets owned over $1 million in the name of fairness. The United Nations financial transaction tax might also be buried in this bill. Finally, he might try to put some kind of carbon tax on utilities and refineries in this bill.
The fall will be all about Obama’s tax reform. It will be popular with the middle class and lower classes who will gain and not perceive the VAT to be significant and won’t perceive the asset tax as ultimately applying to them. Republicans will fight at first and face a media firestorm calling them the protectors of the rich. Eventually they will fold and the Democrats will have both a political victory and a stealth tax system in place (VAT, asset tax, IRA tax, financial transaction tax) they can increase every time they want additional revenue.
Based on the experience of the past 2 years, I have every reason to believe Boehner will compromise and Obama will end up with the winning hand. He is a deal maker, not a principled and courageous statesman.