Correction: An earlier version of this article misstated the amount of net tax increases Republicans said they were willing to accept. It is $300 billion over 10 years.
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Senate Republicans are willing to accept hundreds of billions of dollars in net tax increases over a decade as a part of a super committee deal, according to aides who call the move a major concession. Democrats describe it as a public relations ruse, and one they have already rejected.
The plan's “centerpiece" would be Republican acceptance of eliminating certain tax deductions for the wealthy in exchange for a permanent reduction of the marginal tax rates set under President George W. Bush, said one aide to a Republican super committee member. The GOP would set the income-tax rate on the richest at 28 percent.
Republicans say they could accept up to $300 billion in new taxes as part of a plan that cuts the deficit by $1.2 trillion over 10 years—the goal the super committee must meet to stave off mandatory cuts under this summer’s Budget Control Act.
But Democrats say Republicans calculated those figures by counting the savings portion of eliminating some tax deductions but not counting trillions in lost revenue from reducing marginal-tax rates. The Congressional Budget Office would likely score the proposal as increasing deficits when compared to current law.
Super committee Democrats therefore rejected the offer as “unserious,” according to an aide who called the plan “a huge windfall for millionaires and does nothing to address our debt crisis.”
Another knowledgeable Democratic aide said: "This plan would provide the very wealthiest Americans with one of the largest tax rate cuts ever. It's a shell game, a thinly veiled attempt to appear to put revenue on the table while simultaneously removing far more with massive tax cuts for wealthy Americans. This plan is not a solution Democrats or middle-class Americans would ever be willing to accept."
According to Republican aides, the proposal would trim $700 billion from the budget over 10 years with roughly half that amount coming from entitlement spending. Republicans would also increase government fees to find more savings.
Republicans Sen. Pat Toomey, R-Pa., outlined the plan in talks with Senate Finance Committee Chairman Max Baucus, D-Mont. Democrats say Baucus rejected the idea.
Republicans “are anxious to promote a certain concept with all of you, but I’ll be very clear that whatever they put there doesn’t get the job done, and we’ve got some distance to travel and we’re working very hard to do that,” Sen. John Kerry, D-Mass., who sits on the super committee, told reporters Tuesday.
A senior Democratic aide said that Senate Majority Leader Harry Reid, D-Nev., is “highly skeptical” of the GOP’s sincerity, adding: “We still haven’t seen anything on paper.”
Republicans say that Democrats now want the panel to fail while they do not believe failure is an option.
“It does raise your suspicion that the folks down at the White House are pulling for failure,” Senate Minority Leader Mitch McConnell, R-Ky., said. “Because you see if the joint committee succeeds, its steps on the storyline that they’ve been peddling, which is that you can’t do anything with the Republicans in Congress.”
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