President Obama is currently in a battle with congressional Republicans over federal taxes and spending. The Republicans are adamant about instituting more spending cuts and not raising taxes at all, as a means of helping ease our nation’s deficit spending. President Obama insists on both spending cuts and tax increases. With both sides deadlocked, the so-called sequester seems almost certain to kick at the beginning of March.
However, there is one way President Obama could gain the upper hand and possibly force the GOP into agreeing to some tax increases. He could propose tax rate decreases 70% of the American people, while calling for tax rate increases and the loss of many deductions for the top 30% of taxpayers. This plan would effectively increase overall tax revenue. The president would have the Republicans pinned against the wall, as they would have to oppose tax decreases for 70% of all taxpayers in order stop an overall tax increase.
The majority of voters would be on President Obama’s side, clamoring for their tax cuts. This would create intense pressure on Republicans to cave in on their anti-tax pledge and go along with the president’s plan. It would be interesting to so how such a scenario would play out.