Ex-Clinton team: Obama can go farther on fiscal cliff proposal

>>> one group of democrats who know a thing or two about budget surpluses think the president can go a little further with his fiscal cliff plan. members of president clinton 's economic team, people like bob rubin and larry podesta, have put their name to a plan that calls for $200 billion more in tax revenue than even the president is asking. for more now we have with us william cohen in new york, a columnist for the bloomberg view, and clarence page , a columnist for "the chicago tribune ." welcome to both of you. clarence, one thing this makes plain is democrats are feeling confident in a fiscal cliff win. why not ask for more?

>> well, they're certainly asking for more than president obama is asking, and that is the point here. they feel that the policies of the clinton era that gave us the prosperity that we saw back then would be good to impose now. they are really calling for a different kind of arrangement pushing for a simplification of the tax code that would include taxes on cigarettes and alcoholic beverages which would cross income lines, those kind of consumer taxes hit lower income tax people -- taxpayers as well as upper, and they want to get rid of the amt, that automatic tax that's designed to make sure that older -- rather, the higher income earners will pay some minimum tax, automatically a minute tax. they have some additional taxes. they want to get rid of capital gains tax that benefitted mitt romney . it's a different arrangement but a more progressive tax .

>> bill, interestingly their plan suggests that tax increases should start at $422,000 instead of $250,000 that the president has set. why would that make such a difference or not so much of a difference in circumstances?

>> well, martin, it would obviously hit fewer people. you know --

>> and therefore, produce less revenue.

>> produce less revenue but at higher rates potentially than the president is talking about. i mean, you know, the thing is even though we feel like we are constantly hearing from bob rubin and larry somers and roger altman , a little bit of a bad penny --

>> you have heard this before.

>> on the other hand, they were absolutely right. even bill krystal agrees with them. the economy boomed during the middle of the clinton two administrations when the high tax rate was at 39.6%. we had a huge expansion of productivity and everybody was feeling quite prosperous as i recall. and so the question is why not seriously go back to something like that again? i think we can stipulate that nobody wants to pay more taxes. i don't want to pay any more taxes, you don't, but we've just come through this period where we've funded two huge, expensive wars and didn't pay for it, and now the bill is coming due. what a surprise. we've got to get around to paying for it.

>> what about this idea of killing this carried interest notion and also increasing the amount charged against dividends. of course, warren buffett has suggested if you're earning over $1 million in terms of your capital benefits, then you should be tacked at a minimum of 30%. does that make sense?

>> it certainly makes sense that the carrot interest, this province of private he can quit guys like mitt romney that we've been talking about for years, should go up. it's not right that they get to, you know, get a low tax rate --

>> or recalibrating what is earned income but having it as interest.

>> it's completely not fair. it doesn't pass the fairness test. that rate should be -- but that's not a lot of people who get that benefit. and capital gains in general, i think that rate can stand to go up and, frankly, warren buffett is right. you're not going to not do an investment because you may have to pay a little more in taxes.

>> clarence, we don't know for certain what speaker boehner 's reaction to this plan is however i suspect it will be something like his reaction to the president's.

>> itches just flabbergasted. i said you can't be serious. right now i would say we're nowhere, period. we're nowhere.

>> we're nowhere and he's flabbergasted. can we really get away with just the $800 billion in tax revenue that he promotes as being the answer to the fiscal cliff?

>> well, that needs to be worked out, but i think it's interesting that while speaker boehner says we're getting nowhere, the republicans are already starting off from a position that is closer to obama's than they were at this time last year. they are now backing away from the entitlement cuts they were talking about. they haven't given any specifics on what kind of deductions and loopholes they want to get rid of, but they're leaving that for the committees on capitol hill if they can get away with it. but we see president obama getting tougher right now on what he's calling for while the republicans, if you look at the numbers, they're really not asking for as much. i think we're seeing speaker boehner getting his ducks in a row to cut a deal that is going to try to get settled before the fiscal cliff goes over.

>> bill, "the washington post " today has a poll which says 53% of americans are likely to blame republicans and just 27% the president if they don't agree on a fiscal cliff. we know that after the election, 60% of people said let's raise taxes on the wealthiest. what more does john boehner need?

>> i don't understand the republicans' thinking on this. i really don't. this is power politics . they don't have the leverage in this situation. if they don't cut a deal within the next 30 days , you're going to see tax rates rise on all americans. you're going to see huge cuts in the defense budget . we're probably going to have a double dip recession, and until the congress then gets its act together to fix it and lower rates on the middle class , you will have the republicans essentially responsible for raising tax rates on the middle class . i can't imagine, again, bill krystal said this yesterday. i can't imagine why the republicans would want to be known as raising tacks xes on the middle class .