The tax fight isn’t over.
After Congress passed and President Obama signed a bill to allow automatic tax hikes on high incomes, Democrats and Republicans are fighting about taxes yet again.
In separate interviews over the weekend, Obama and Senate Majority Leader Harry Reid both said they will push for more revenue increases as part of another deal to avoid the looming “sequester” — automatic budget cuts that will take effect March 1, barring agreement on other deficit-reduction measures.
Both suggested closing tax “loopholes” as a way to raise more cash for the government.
“There’s no doubt we need additional revenue, coupled with smart spending reductions in order to bring down our deficit,” Obama said in an interview with CBS’s Scott Pelley. “Can we close loopholes and deductions that folks who are well connected, and have a lot of accountants and lawyers, can take advantage of, so they end up paying lower rates than say, a bus driver or a cop?”
Reid told ABC’s George Stephanopoulos that “without any question,” more revenue needs to be part of a follow-up deal.
“The American people are on our side,” he said. “The American people don’t believe in these austere things. We believe that the rich should contribute. We believe we should fill those tax loopholes — get rid of them, I should say. And that’s where we need to go.”
Republicans, needless to say, do not agree.
When the Senate reopened for business on Tuesday, Minority Leader Mitch McConnell devoted most of his speech to bashing the idea of new taxes instead of spending.
“If you were to listen to the Democrats, you would think that all our problems would be solved by raising taxes on private jets or energy companies,” McConnell said, arguing that tax hikes — even the so-called “loopholes” Democrats want to target — will drive jobs overseas. “They don’t want the facts to get in the way of a good political talking point.”
“That issue is closed,” Michael Steel, spokesman for House Speaker John Boehner, told ABC News. “President Obama got the tax hikes he wanted last month. Washington has a spending problem, and that’s what President Obama and Senate Democrats need to address.”
It’s not that Republicans are totally opposed to closing tax “loopholes.” The conservative Club for Growth, which backs Republican primary candidates who support anti-tax policies, says it supports what Obama and Reid are pushing — but only as part of a broader deal on tax reform.
“We’d have to see what the legislation looks like. If it’s eliminating the sequester and just closing a bunch of loopholes without any tax reform, we’re opposed to it,” Barney Keller, the group’s spokesman, told ABC.
If it seemed that the tax part of the “fiscal cliff” was over, it isn’t: With Democrats pressing for revenue increases and Republicans pressing for only spending cuts, it appears both sides are where they were before the last agreement was passed and signed.