Obama Willing To Up Threshold For Raising Taxes On Households To $400,000
NEW YORK (CBSNewYork) -- There were signs Tuesday that a deal to avoid the so-called "fiscal cliff" may be in the offing. President Barack Obama blinked on tax hikes and so did House Speaker John Boehner.
And that could be good news for Tri-State Area residents, specifically.
Despite a whole lot of posturing, the stalemate on the fiscal cliff appears to have ended.
"I'm an optimist here. I think the odds are greater than half that we will not go over the fiscal cliff. That they'll come to an agreement is it certainty far from it. Has the fat lady sung? No she hasn't even tuned up," Sen. Charles Schumer told CBS 2's Marcia Kramer.
Both sides have moved off hardline positions. President Obama, who had insisted on raising taxes on households making $250,000 and up, now says he can swallow $400,000.
"Our hope continues to be to reach an agreement with the president," Boehner said.
Boehner, who was just saying "no" to all tax hikes, said he was willing to up the tax rate on people making more than $1 million, but on the chance he can't reach a deal with the White House by Jan. 1, the Ohio Republican said he was also working on his own bill, which has been dubbed "Plan B."
"Plan B would protect American taxpayers who make a million or less and have all of their current rates extended," Boehner said.
The White House quickly put the kibosh on that.
"The fallback plan achieves nothing. You would lose hundreds of millions in revenue," Press Secretary Jay Carney said.
The president's offer also includes a reduction of future cost-of-living increases for Social Security recipients, but he is holding firm on keeping 65 as the age Americans can collect Medicare. However, protecting households with incomes less than $400,000 from increased tax rates would have a huge effect in the Tri-State Area, where there are many two-income families.
"To move it up to 400 will mean that high income states like New York will do better, so that's a good thing, but we still have a ways to go there are, a lot of disputes between Speaker Boehner and the president," Sen. Schumer said.
Even if there is a deal it looks like area residents will still have to swallow a healthy dose of tax pain. That's because both Democrats and Republicans seem inclined to let the payroll tax holiday expire.
That means your taxes could go up as much as $2,000 per year, which would produce $115 billion a year for debt reduction.
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