Fiscal cliff: Most of Florida's federal politicians want to avoid tax increases

This Nov. 16, 2012, photo shows President Barack Obama with House Speaker John Boehner of Ohio in the Roosevelt Room of the White House in Washington, during a meeting to discuss the deficit and economy. Congress and the White House can significantly soften the initial impact of the “fiscal cliff” even if they fail to reach a compromise by Dec. 31. One thing they cannot control, however, is the financial markets' reaction, which possibly could be a panicky sell-off that triggers economic reversals worldwide. The stock market's unpredictability is perhaps the biggest wild card in the political showdown over the fiscal cliff. (AP Photo/Carolyn Kaster, File)

This Nov. 16, 2012, photo shows President Barack Obama with House Speaker John Boehner of Ohio in the Roosevelt Room of the White House in Washington, during a meeting to discuss the deficit and economy. Congress and the White House can significantly soften the initial impact of the “fiscal cliff” even if they fail to reach a compromise by Dec. 31. One thing they cannot control, however, is the financial markets' reaction, which possibly could be a panicky sell-off that triggers economic reversals worldwide. The stock market's unpredictability is perhaps the biggest wild card in the political showdown over the fiscal cliff. (AP Photo/Carolyn Kaster, File)

David Albers/Staff
- U.S. Sen. Marco Rubio speaks to the media during a book signing to promote his new autobiography, An American Son, at the Naples Costco on Sunday, July 1, 2012.

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David Albers/Staff - U.S. Sen. Marco Rubio speaks to the media during a book signing to promote his new autobiography, An American Son, at the Naples Costco on Sunday, July 1, 2012.

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— As the deadline for the so-called fiscal cliff looms, the state's leading federal politicians can agree on this much — no one wants to go over it.

But with just two weeks before the Dec. 31 deadline, Congressional leaders remain at odds over what to do to prevent the forced cuts and tax increases from going into effect in 2013.

Some want to close loopholes and reduce deductions. Others think tax increases should kick in for the country's top earners.

That clash has been a key part of negotiations for a deal to avert big tax increases and spending cuts due to begin in January unless President Barack Obama and Congress reach a deal to rein in the government's growing debt.

Members of Southwest Florida's congressional delegation said recently they are hopeful Republicans and Democrats will reach a deal by the Dec. 31 deadline. But members of the heavily Republican delegation said they are hesitant to support a plan that includes tax hikes. Instead, they said they want a plan that has little effect on the economy, while making substantive changes to the tax code.

"I think something will happen. I do, I believe that we'll avoid this," Florida GOP Sen. Marco Rubio said during a Politico Playbook breakfast in Washington, D.C., earlier this month. "There's just too much at stake. I mean, I think something will happen."

Obama wants to raise $1.6 trillion in revenue over the next 10 years, partly through letting a decade-old tax cut on the country's highest earners expire at the end of 2012. While the president would continue the Bush-era tax cuts for the middle class, increases would kick in for people making more than $200,000 and couples making more than $250,000 a year. The highest rates on top-paid Americans would rise from 33 percent and 35 percent today to 36 percent and 39.6 percent.

House Speaker John Boehner, R-Ohio, offered $1 trillion in higher tax revenue over 10 years and an increase in the top tax rate on people making more than $1 million a year.

The offer calls for about $450 billion in revenue from increasing the top rate on million-dollar-plus incomes from 35 percent to the Clinton-era rate of 39.6 percent. The additional revenue required to meet the $1 trillion target would be collected through a rewrite of the tax code next year and by slowing the inflation adjustments made to tax brackets.

Boehner, in return, is asking for $1 trillion in spending cuts from government benefit programs like Medicare.

Members of the state's Congressional delegation said recently that while they understand the need for new revenue, they wouldn't support tax increases.

"I think it would be a grave mistake to do anything that ... would cause the future loss of jobs," said Rep. Mario Diaz-Balart, R-Miami. "Everything has to be on the table that doesn't risk people's jobs, that solves our fiscal situation long-term."

Diaz-Balart, whose cross-state district includes part of Collier County, said he wouldn't support a proposal that includes tax hikes. Neither would Rubio, who was unavailable to comment. Both men are among the 279 members — 238 representatives and 41 senators — of the 112th Congress who have signed the Americans for Tax Reform pledge vowing not to raise taxes.

Outgoing Rep. Connie Mack, R-Fort Myers, also signed the pledge.

Neither Mack nor a spokesman could be reached for comment about where the congressman stands on recent proposals.

Rubio has said his opposition has little to do with the pledge; instead he's against the proposed tax increases because he thinks they may stifle growth.

"It's not about a pledge or millionaires and billionaires, it's about growth," Rubio told Politico earlier this month. "This stuff hurts growth. So if the president has a tax increase that will help grow the economy, I'm interested to hear about it."

Economists have said it is unclear whether higher tax rates would hurt the economy more than curbing deductions. While many economists say the economy would work more efficiently if the tax code provided fewer options, many said it would depend on which deductions lawmakers curb.

"I'd definitely go for cutting deductions first, especially if I have the opportunity to make the choices about which deductions go," said Alan Auerbach, director of Robert Burch Center for Tax Policy and Public Finance at the University of California, Berkley.

Bill Nelson

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Bill Nelson

But the president's plan isn't universally opposed.

Democratic Sen. Bill Nelson said in a statement that he thinks Congress needs to "extend the Bush-era tax cuts for people making less than $250,000 a year."

"I believe we'll get a deal, but it'll need to be a balanced and bipartisan approach," Nelson said in a statement to the Daily News. "It should include targeted spending cuts, and making sure our tax code is fair and closing tax loopholes that benefit certain special interests."

While lawmakers are optimistic a deal will be reached by the Dec. 31 deadline, there is a chance the solution will be a short-term one, thus forcing the 113th Congress to come up with a solution. That would give incoming Rep. Trey Radel, R-Fort Myers, a chance to weigh in on a long-term solution.

Radel, who also signed the Americans for Tax Reform no-tax-increase pledge, said he supports a plan to reduce or eliminate loopholes and deductions. Radel also said he would support targeted spending cuts, not the across-the-board cuts scheduled to go into effect in January.

"Right now it's cut off this much and it's just not smart," he said. "When you cut back on your home spending you don't feed your kids less, you get rid of cable TV and don't have an expensive vacation."

While Radel is prepared to get to the nitty-gritty of negotiations once he takes office, he's confident all sides will reach a compromise in time.

"I think they'll come up with a long-term solution they can agree on," he said. "Hopefully, they'll come up with a long-term solution. (That) is the best thing they can do."

Last of a series.

__ The Associated Press contributed to this report.

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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