David Koch: 'Some Tax Increases' May Be Needed To Reduce U.S. Deficit

Billionaire Republican Donor Says We May Need Higher Taxes

Even billionaire Republican donor David Koch says the U.S. probably needs higher taxes to reduce the federal budget deficit.

"I think it's essential to be able to achieve spending reductions, and maybe it's going to require some tax increases," Koch, the eighth-richest man in the world and one of the most influential donors in the Republican Party, told Politico on Thursday.

Koch also called for a balanced federal budget, telling Politico, "otherwise, we're in a terrible deep problem." According to Koch, a balanced budget would require "probably every federal department ... to take cuts."

While his call for reduced spending is expected, Koch's concession on the need for higher taxes to balance the budget is a surprising move, given his overall support of shrinking the size of government.

Koch and his brother Charles Koch, co-owners of Koch Industries, founded the super PAC Americans for Prosperity, which is credited with helping launch the fiercely anti-tax Tea Party and has spent an estimated $18.2 million on TV election ads in the 2012 campaign so far, according to ProPublica. The Koch brothers plan to spend as much as $400 million during the 2012 presidential election to try to defeat President Barack Obama.

Americans for Prosperity says it supports "cutting taxes and government spending" on its website, and the Kochs arguably have played a major role influencing the Republican Party's agenda.

Koch's concession on taxes comes as Democratic and Republican lawmakers remain deadlocked over how best to balance the budget, as the government faces a "fiscal cliff" coming at the end of this year, or more than $600 billion in automatic spending cuts and tax increases that the Congressional Budget Office says would plunge the U.S. into recession next year.

Avoiding the fiscal cliff is possible if lawmakers can come to a compromise about how to reduce the federal budget deficit. But although Democrats have said they are willing to consider a combination of both spending cuts and tax increases, congressional Republicans have resisted allowing tax increases into the mix.

(Hat tip: ThinkProgress.)

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