Differences Over Tax Hikes Continues to Impede Talks

It’s now less than a month left for congressional leaders to resolve the fiscal crisis but talks are heading nowhere as both sides remain stubborn on their stance.

While there are many issues such as defense spending cuts or changes in entitlement programs like medicare that have seen the White House and Congressional Republicans having heated round of arguments, no other issue during negotiations has proved to be as big impediment as debate over tax increases.

Indeed, the debate over whether Obama administration should extend Bush-era tax cuts and increase taxes on rich Americans has nearly stalled congressional negotiations.

The Obama administration, which is hell-bent on raising taxes on top 2 percent earners, has met with strong resistance from the GOP since it is totally against any such move.

According to sources from both sides, on Thursday, an official from an Obama administration gave a new ultimatum to Congressional Republicans, stating that no deal was possible unless the GOP accepts its proposal of increasing taxes on affluent Americans.

Although it seemed on Friday that House Speaker John Boehner was willing to discuss over the tax issue, he quickly ruled out any reconciliation over this topic. Boehner even said that President Obama’s “slow walking” on the issue would eventually drag the U.S. economy on the edge of ‘fiscal cliff’.

No progress has been made in Washington, this what the Republican said on Friday.

“As I’ve said many, many, many times: I oppose tax-rate increases because tax-rate increases cost American jobs. That has not changed, and will not change,” said Boehner in a written statement.

Boehner also described his meeting and a phone-call on Wednesday with President Obama as unproductive, saying that despite  the GOP giving some concessions with regard to tax increases, the Whitehouse was not showing any flexibility on the issue of spending cuts.

“The phone call was pleasant—but it was just more of the same”, said Boehner.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.