House GOP: 'Plan B' a tax cut

An increasing number of House Republicans are shifting their rhetoric on taxes in the wake of Speaker John Boehner’s proposal that the House vote to lock in tax rates on income under $1 million per year.

While Boehner’s proposal would mean a tax hike on income above $1 million, several Republicans exited a closed-door meeting where the proposal was announced saying it would represent a tax cut for most taxpayers.

Rep. Jeff Flake (R-Ariz.), for instance, bristled at the suggestion that the backup plan would amount to voting for a tax hike. He pointed out that if Congress does nothing, income tax rates on most taxpayers will rise.

“Nobody's raising tax rates. Tax rates are in law, they're going to be raised,” said Flake, who has made similar arguments in the past. “Any vote the House takes will be to lower taxes for some people.”

“Taxes are going up anyway. Period. Period,” said Rep. Dennis Ross (R-Fla.) “That is not even an assumption. That's a fact. What we are debating now is whether we will see them going up for everybody, or go up for a few.”

“Tax rates are going up if nothing is done, so any action would be a tax cut,” said Rep. Doc Hastings (R-Wash.), a Boehner ally and current chairman of the House Natural Resources Committee.

Those messages suggest support for Boehner’s move, but other Republicans accused the party of going down a dangerous path.

“Once you cross that line and say, it’s OK for some people’s taxes to go up,” Rep. Jim Jordan (Ohio), the outgoing chairman of the conservative Republican Study Committee, told reporters. “I think it’s a mistake for the Republican Party. So that’s what I think a lot of members are struggling with.”

Rep. Tim Huelskamp (R-Kan.), who recently got into a spat with GOP leadership over committee slots, continued the most recent GOP line that tax rate increases would hurt small businesses.

“As much as Washington would like to say, ‘Well, we planned on raising your taxes even more,’ I mean, that’s a silly argument,” Huelskamp told The Hill. “It’s going to cost jobs, and that’s an undisputed economic fact.”

Republicans had previously criticized attempts to “de-couple” high-end and middle-class tax rates, like a Senate bill passed this summer to extend rates for family income up to $250,000 a year. Because that bill would have allowed taxes to rise on annual income above $250,000, many Republicans argued it was a tax hike that would hurt small businesses.

Democrats were the ones previously casting legislation to extend rates on income below $1 million as a tax cut, even if it would allow rates to rise on income above that threshold.

The anti-tax crusader Grover Norquist – who had said that Republicans would stand strong on rates – has been noticeably quiet in recent days. Norquist’s Americans for Tax Reform sponsors a pledge against tax increases that the vast majority of congressional Republicans have signed.

It was not immediately clear whether Norquist would view Boehner’s Plan B as a tax hike.

President Obama has been demanding that Republicans agree to extend current tax rates only on annual family income below $250,000. But he shifted in an offer this week, saying he could agree to only raise tax rates on annual income above $400,000.

Most Republicans throughout the year have pushed to extend all of the individual tax rates.

Many GOP lawmakers – leadership and the rank-and-file alike – also slapped down an idea, floated earlier in the “fiscal cliff” debate by Rep. Tom Cole (R-Okla.), to go ahead and pass a measure just extending the rates for family income up to the $250,000 mark.

For the most part, those lawmakers continued to hold the line against allowing any tax rate increases until Boehner offered the $1 million threshold to Obama last week.