Rivlin: Tax Compromise at $500,000 Level
Alice Rivlin, a member of Obama’s** deficit commission (technically, the **National Commission on Fiscal Responsibility and Reform), tells Damian Paletta at The Wall Street Journal that Congress should compromise on tax cuts by pushing the floor higher.
The White House and most Democrats want to extend the Bush tax cuts for the first $200,000 of income ($250,000 for couples filing together), but to let income taxes rise to 2000 rates starting with the $200,001st dollar. Republicans have strongly opposed the Obama plan, arguing that nobody’s income taxes should rise and that Congress should make the cuts permanent. (That would cost something like $3.7 trillion over the next 10 years, and would ultimately reduce GDP, the CBO says.)
Rivlin and some legislators, including Sen. Jim Webb (D-Va.), have indicated support for raising taxes starting at a higher level — perhaps $1 million. Paletta writes:
Ms. Rivlin said in an interview that lawmakers and administration officials should consider temporarily exempting everyone who makes less than $500,000-a-year from a higher tax threshold. This is higher than the $250,000 level the White House has proposed but less than the $1 million some lawmakers on Capitol Hill have recently proposed. There is also a large group of lawmakers who have said the tax cuts should be extended for all income levels for at least two more years.
Ms. Rivlin said her proposal would “cut a deal” on the definition of “high income.”
“There would be few people that believe $500,000 is not a lot of money,” she said.
Ms. Rivlin has served as director of the Congressional Budget Office, director of the White House Office of Management and Budget, and vice chairman of the Federal Reserve. She is a senior fellow at the Brookings Institution in Washington.