With time dwindling before the scheduled tax increase on all Americans on January 1, House Speaker John Boehner (R-OH) has switched to his“Plan B,” allowing the Bush tax cuts to expire on income in excess of $1 million. Originally, Boehner refused to consider any deal without an extended tax cut for the top 1 percent of earners, claiming it would kill jobs and hurt businesses.
Bohener’s new baseline is still far higher than Obama’s latest limit, which revised the income bracket up from incomes of $250,000 to $400,000. But the Speaker has changed his tune since May, when Rep. Nancy Pelosi (D-CA) tried to hold the same vote.
At the time, Boehner refused to let Congress pass a tax cut for middle-class families without one for millionaires, calling Pelosi’s offer “bullshit” at a closed meeting. He cited a popular GOP myth that small businesses would be affected by the expiration of the tax cuts on individuals making $250,000 or more, claiming it was “a big mistake” that would “kill jobs.”
“I believe that raising taxes at this point in our recovery is a big mistake,”Boehner said at a Capitol press conference when asked about Pelosi’s letter. [...] “Even under Ms. Pelosi’s argument, half of those who would get this higher tax are small-business people that are sub-Chapter S or other types of pass-through entities,” Boehner said. “At a time when we are trying to help small businesses create jobs, this proposal would kill jobs.”
In fact, only 3 percent of small businesses would be affected by the tax increase. Before the Bush tax cuts, small businesses grew twice as fast under Clinton rates.
Boehner’s fiscal cliff deal is full of pseudo-compromises. Besides his new willingness to allow tax cuts to expire for millionaires, the Speaker’s deal also promises not to bring the nation to the brink of default again for at least one year — in exchange for devastating spending cuts.
The House will vote on two separate proposals to extend the Bush tax cuts for people making $250,000 and below or for people making $1 million and below on Thursday.