At Talking Points Memo, Brian Beutler reports that Sen. Ben Nelson (D-Neb.) is not interested in raising taxes on households making more than $250,000 a year or individuals making more than $200,000, as the White House wants. Without Nelson, the most moderate Democrat, the White House proposal becomes untenable — it will not beat a Republican filibuster in the Senate — and a two-year extension of all the tax cuts seems the likeliest path.
“I support extending all of the expiring tax cuts until Nebraska’s and the nation’s economy is in better shape, and perhaps longer, because raising taxes in a weak economy could impair recovery,” Nelson said today.
Other moderate Democrats are coming out in opposition to the tax hikes, even on the wealthiest, in the House. For instance, Rep. Jim Himes (Conn.) supports an extension because $250,000 a year “does not make you really rich.” (Maybe not in Fairfield County, which Himes represents. It is one of America’s wealthiest counties, and has the highest concentration of hedge funds outside of Manhattan. If you wanted to, you could buy a house like this.) But, only about two percent of filers make that much nationally.
If Democrats attempt to raise taxes on high-income Americans, a bill could founder in the Senate — and if Congress comes to no agreement on the tax cuts, they expire. That means income taxes revert to 2000 levels for everyone, hiking taxes even on low earners.