Senate Democrats, back to business this week, are blasting out some snazzy graphics regarding the Bush tax cuts. Here’s one from today:
The grist for the graphic? Every Senate Republican has agreed to filibuster any bill renewing or making permanent the Bush tax cuts for middle-class families, while letting the cuts for high-income earners expire. The White House has proposed letting the top marginal rate rise from 35 to 39.6 percent for Americans making more than $250,000 a year as a household or $200,000 a year as an individual — about two percent of filers. That would save the country $700 billion in lost revenue.
Sen. Harry Reid (D-Nev.) supports the Obama plan, but might be forced to play chicken with the GOP if he wants to press for the tax increase on the two percent. If Congress passes nothing before Jan. 1 due to Senate filibusters, all of the tax cuts expire, including for low-income and middle-income earners. That is an outcome nobody wants.
More-moderate Democrats are also indicating their lack of support for the Obama plan, meaning it has no path through the Senate. (Democrats need every member of their caucus plus one Republican to overcome a Republican filibuster. As I wrote back in July, Democrats do not have reconciliation, which precludes a filibuster, on the table.)
I don’t think it makes sense to raise any federal taxes during the uncertain economy we are struggling through. The more money we leave in private hands, the quicker our economic recovery will be. And that means I will do everything I can to make sure Congress extends the so-called Bush tax cuts for another year and takes action to prevent the estate tax from rising back to where it was.
These cuts were originally passed at a time when the economy was strong. I supported most of them, but opposed a few of them because I thought we needed to pay the costs of the war we were fighting after 9-11, and we needed to stay out of debt. But now in our current economic situation, we cannot risk the economic headwinds that would be caused by tax increases. We need to keep as much money as possible in people’s pockets and business’s bank accounts.
I know that many people, including the President, have argued that the tax cuts should not be continued for people making more than $200,000 a year, but to me these are the people we need to be using their income to spend and invest to spur growth and job creation.
The fact is that the top three percent of American income earners account for 25% of the consumption in our economy. Remember consumer demand is still the major driver of economic growth in America. I want the top income earners in our country to have the confidence and the money to spend and invest over the next year, rather than worrying about paying more in taxes to the federal government.