Republicans in the House of Representatives are fighting tax increases on capital gains and dividends, ruling out investment income as an acceptable source of additional revenue in increasingly urgent talks to avert the US fiscal cliff.
The debate on investment income highlights the difficulty in finding common ground, with less than a month to go before the US economy is otherwise walloped by a $600bn mix of annual spending cuts and tax rises that could tip it back into recession.
“We are opposed to raising rates on investment income,” one senior aide to House Republican leaders told the Financial Times, narrowing the window for compromise with Democrats and President Barack Obama.
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