By now, it is no secret that the United States may be heading towards a financial catastrophe with the vastly approaching fiscal cliff issue. For those who have not followed the news as of late, the republicans and democrats have to reach an agreement if they want to extend the tax cuts implemented during the Bush Era, and to keep avoid cuts in areas that provide assistance to a lot of people, such as Medicaid. However, as of late, it has appeared that neither side is really too interested in working with the other. Although, it is apparent that the republicans have at least agreed to some of the things that Obama, and the democrats, have asked for.
Obama wants to raise taxes on families, and individuals, who make $250,000 or more from 35 percent to over 39 percent. Many might believe that this would bring in major revenue to the United States, and that it would not affect these people, but both thoughts would be wrong to an extent. The problem is that if only 2 percent of people supposedly fall in this income class, you are not talking about a ton of money being raised especially in comparison to the $16 trillion the United States has in debt. Additionally, many of those in this income class are business owners, or at least have the power to hire people for a company. When you hurt them by cutting their income by over 4 percent, you are talking about the income associated with numerous jobs.
The republicans would rather see loopholes and certain tax deductions capped for this tax level instead of essentially cutting their income by 4 percent. This seems like a much more logical goal, but Obama, and the democrats, claim it will not raise enough money. Obama has gone on record as essentially saying that if the republicans do not agree to the higher tax bracket for those earning $250,000 or more, he will let the Bush Era tax cuts end for everyone.
By ending these cuts, even the poor and middle class would see their taxes increase, and cuts would be made in areas that could affect many people. As a result, Boehner and Obama met today for the a face-to-face meeting, which is their first since the middle of November. This was also their first individual meeting since the beginning of summer.