Republicans and Democrats square off on budget talks
The tense negotiations to raise the debt ceiling have yet to reach a verdict as the August 2 deadline draws closer. While President Obama has tried to introduce a compromise, Republicans are firmly against the idea of tax increases on wealthy Americans, arguing that the economy has made it so that no one should be paying more taxes. They have also pointed out that spending more in taxes may translate to more government spending.
Speaker of the House John Boehner claimed that the Republicans had drafted a plan that could cut approximately $4 trillion in spending, but that it was unlikely to get the go-ahead from Democrats. Instead, he believes that a $2 trillion deal would be more realistic, according to CBS News.
While Boehner suggested that Vice President Joe Biden's bipartisan budget team had already come up with a way to meet that goal, Democratic Representative Chris Van Hollen says otherwise.
"[$2 trillion in cuts] was never there. That's the problem," Van Hollen said on CBS' "The Early Show." "What we talked about was about $1.1 trillion in cuts and savings. You're hearing grossly inflated numbers coming out from the Republican side. In the Biden group we did not get close to $2 trillion in cuts and again the gap there was closing these corporate tax loopholes."
Corporate tax loopholes have been an issue for some time, but the legislation may at least take aim at the fact that many major corporations pay next to nothing in taxes each year. Most famously, General Electric paid nothing in federal taxes for 2010, despite billions in profits.
Most of this is due to off-shore tax havens in countries like Bermuda, as companies avoid the 35 percent top tax bracket for American businesses, according to ABC News.