The annual increases in the thresholds for income-tax brackets would be smaller under the different cost-of-living yardstick than they are in the current system. As a result, more income would be pushed into higher brackets and subject to higher tax rates.
Late last week, Obama rejected a Dec. 14 offer by Boehner to raise tax rates on household income exceeding $1 million a year and lift the federal debt ceiling in exchange for containing entitlement program costs.
Higher Rates
While Obama wants higher rates for income exceeding $250,000, Boehner’s offer marked movement because he has opposed increasing tax rates for any income level.
Some Democratic Senate leaders had indicated last week that once Boehner showed a willingness to raise income tax rates for top earners, Democrats would be open to negotiating changes in entitlement programs.
“We’re waiting for them to go to the top rate and that opens the door to everything,” said Senator Chuck Schumer of New York, the Senate’s third-ranking Democrat, said last week.
Boehner was invited yesterday to today’s meeting, which was arranged by staff members for the two men, according to a Republican congressional aide who requested anonymity to discuss plans for the private talks.
It was their third face-to-face meeting on the budget this month, after one on Dec. 9 and another on Dec. 13.
$1 Trillion
In his Dec. 14 offer, Boehner also said he would accept $1 trillion in revenue, up from $800 billion, according to a person familiar with the talks who requested anonymity when discussing the negotiations. That person said Boehner’s offer would pair the revenue increase with equal cuts to entitlement programs.