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Republicans be very careful what you wish for limiting deductions could be an even bigger tax hike -- raising rates.
We do the math you decide welcome everybody I'm Neil Cavuto -- here's some Democrats.
Quietly -- even giggle but they've got the grand old party -- a grand old -- think.
Making Republicans think that not getting tax rates right on the rich is a win win in fact the deal to get that win namely limiting deductions and tax breaks could end up -- the rates.
Even more consider this it's a figure I'm hearing bandied about a lot more lately 50000.
Dollars that is the likely cap.
That Republicans will agree do for things like.
Mortgage interest charitable deductions whatever now seeing as many in the 200 to two -- and over crowd.
Right off hundreds of thousands of dollars that means hundreds of thousands of dollars more subject.
To taxes get the picture then get this if you limit them to fifty -- No more.
A lot of them are looking at a real federal tax rate closer.
Than the 39 point 6%.
They're -- now.
No wonder some Democrats are laughing all the way.
To the spending -- should -- added the name of avoiding a rate hike are Republicans about to come up with an alternative that proves an even bigger.
Tax -- let excess.
Sabrina Schaeffer and -- Mitchell.
Rich I haven't even gotten did Citi -- related taxes that will go out.
The Medicare surcharge.
For the well to do on investments that sort of thing and I can go on and on.
-- what states are doing with millionaire taxes in the light to go way beyond affecting -- millionaires.
All Republicans missing this.
You know when you come into this argument Republicans our are sort of going into this.
Branding it is a revenue increase refused to say tax increase in all of this part of this they -- create a more efficient system.
In May -- you could lower rates maybe get -- of some deductions -- that generates more economic activity -- -- four.
Generates more money to be tax but as you point out -- they'll be mistaken here you are.
Effectively taking more money from the American population -- you would be.
Even without factoring in economic growth you talk about that that cap the Tax Policy Center says.
A 50000 dollar cap on deductions.
Billion dollars over ten years that's real revenue more revenue tax revenue coming from people and that's just -- straight up tax.
Sabrina you think that's what.
Democrats are are hinting at when they when they say it doesn't have to be a rate hike or -- that that that.
There quietly thinking hey you know with this alternative.
We could actually get more tax revenue.
Right I think it's because we're still having this debate right which is going to work spending -- spending cuts or increasing taxes and and for the record I mean I am I do not think we can tax our way out of debt.
But I think eight being yet it's not politically.
You know affected to try to say that we're going to increase taxes.
And the Republicans are terrified they are between a rock and a hard place there will be skewered by conservative groups that they try to go along with this.
Friday you know impose tax increase says.
But at the same time politically this is -- you know are -- are practically.
I'm this isn't a very difficult situation that can leave the country far worse off -- higher taxes and yet.
You know -- I'm wondering if we end up getting -- and other words a hike in the rates.
And a limit on on wealthier payers the deduction so it could be the worst of both worlds.
The moral of the story as there's no good reason to raise taxes period.
Whether it's by scaling back deductions or whether it's by higher tax rates which I agree with you.
If you do this deduction cap now it will be followed by higher -- -- A year or two from now the problem is 100% plus.
On the spending side of the budget if you increase people's marginal -- -- implicitly what the deduction cap.
May be may be at the math comes out right that's not as bad as an increase in the official top tax rates.
But you're still penalizing people for working saving and investing.
I'm all in favor of getting rid of deductions but only if you use every single penny.
To reform the tax system and give us something non crop from pro growth like a flat tax.
-- -- or -- -- memory serves it right Grover Norquist.
-- Americans -- tax reform there's all argument with the tax pledge that.
A number of Republicans are now abandoning was that you can go ahead.
And and close these little balls if you've found corresponding.
Cuts in other areas or certainly in tax rates down the road is part of quid pro quo always concern was we never get to the -- -- I -- and right and and ended that George Bush senior is best proof of that.
How much is that weighing.
On Republicans who feared they make you -- session.
It's only gonna come back to bite them later.
That is a concern in -- the other concern is to.
You're looking at overall what is the federal government taking from the American population in tax revenue now.
The semantics of what is and is not a tax increase has been that basically the foundation especially with the Republican Party.
Of this entire argument between them -- stock Grover Norquist essentially saying look.
If you reduce deductions by 750 billion dollars over ten years you then must cut rates immediately.
To offset that to give that 750 billion dollars back to another segment of the taxpaying population.
And that's not what we're really seeing here in the discussions which is why -- I said earlier that straight up tax hike that is the position.
-- Grover Norquist not every Republican every Republican.
Out there doesn't believe that if you close private preferences in one place and you get -- of deductions in one place you then must have to have a corresponding offset.
In the next place to ensure that this system creates some type of revenue gain and that's the problem here.
Because Democrats are not gonna walk away with this thing and say.
-- -- economic growth assumptions are gonna get us that one trillion or one point two trillion or one point six trillion dollars in revenue over ten years that we want.
They want -- fast tax increases -- even if that comes from closing deductions.
That's what they're saying they want you know.