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That said, the GOP’s preferred position all along has been a one-year extension of existing income tax rates — though not payroll tax rates. Some still hold out hope that Obama and Congressional Democrats will cave on that issue if Romney wins, lest Obama preside over a massive tax increase just as he leaves office only to hand Romney the opportunity to quickly cut them.
But the Democratic justification for the fiscal cliff’s existence has been to force the GOP to agree to a tax increase, and the White House isn’t backing down.
“The president has long made clear he will veto an extension of tax cuts for the top 2 percent of Americans, wealthiest Americans,” Press Secretary Jay Carney said today. “That has been his position, as you know, for a very long time.”
But Carney acknowledged the tax issue is effectively on the ballot.
“Some of these disagreements will have to be resolved by the electorate, and that’s the disagreement over whether or not we need to give more tax cuts to millionaires and billionaires. The American people will decide that in this election,” he said.
The business community is starting to ramp up the pressure to get a deal.
The Financial Services Forum sent a letter to Obama and Congress today urging them to cut a deal to avert the fiscal cliff. The letter was signed by CEOs of the nation’s biggest financial firms.
Dirk Van Dongen, president of the National Association of Wholesaler-Distributors and a top fundraiser for Romney, said the business community is prepared to ramp up a push for tax reform after the elections.
“I think an accurate characterization of where the business lobby is: We’re prepared, we’re ready to the pull the levers of massive grass-roots mobilization, but the 80-20 in this whole exercise is the election,” he said.
But Van Dongen stressed that the business community clearly does not want to go over the cliff.
“I don’t think there is anybody in the business community who [believes] that doing nothing is a smart option,” Van Dongen said. “It’s a dumb option. It’ll have tremendous negative fallout in terms of the markets and the economy.”
Chris Whitcomb, tax counsel at the National Federation of Independent Business, also said business is focused on the elections.
“Like a lot of people, we are holding our breath to see what happens after Election Day. Nothing’s happening until after then. Our position is to extend all the current rates and current law,” Whitcomb said. “It’s important to extend current policy for a year so that those hard questions can be dealt with in a proper manner.”
Senate Democratic leaders have been ratcheting up their tax rhetoric of late.
Last week, Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.) held a press conference to say that tax reform should be implemented without lowering tax rates for the highest earners.
That would break from the precedent set by tax reform in the 1980s and undercut considerations of the Senate’s bipartisan “gang of six,” which met last week in Virginia with deficit reduction champions Erskine Bowles and Alan Simpson.