In 2003, President Bush and the Republican-majority Congress passed
sweeping tax cuts for the top brackets of wage earners. Those cuts were
originally scheduled to expire after 2010, which Democrats do not plan
on reversing. But now Congressional Republicans are calling on President
Obama and Congress to act to continue the tax cuts, a call that Obama
has hit back against. Here are the cases for and against the cuts.
Warns of 'Ticking Tax Bomb' Politico's Ben White reports, "Republicans
on the House and Ways and Means Committee will begin a push this week
highlighting what they say would be a 'job-killing tax hike' if the Bush
administration tax cuts are allowed to expire at the end of the year.
From talking points to be released by Ways and Means Ranking Member Dave
After running up record levels of spending and
debt – while refusing to pass a budget – Democrats in Washington are now
plotting the largest tax increase in history for American families and
small businesses: a tax increase of over $200 billion next year alone
and $3.8 trillion over the next ten years. … Following the loss of over 3
million jobs since President Obama took office, and despite fears of a
double-dip recession and a national unemployment rate stuck at almost
10%, the Democrats’ massive tax hike will kick in on January 1, 2011 –
hitting millions of small businesses and their employees.
We Need Unemployment Relief, Not Tax Breaks for Rich In a speech
For a long time, there's been a tradition -- under both
Democratic and Republican Presidents -- to offer relief to the
unemployed. That was certainly the case under my predecessor, when
Republican senators voted several times to extend emergency unemployment
benefits. But right now, these benefits -- benefits that are often the
person's sole source of income while they're looking for work -- are in
And I have to say, after years of championing policies
that turned a record surplus into a massive deficit, the same people
who didn't have any problem spending hundreds of billions of dollars on
tax breaks for the wealthiest Americans are now saying we shouldn't
offer relief to middle-class Americans like Jim or Leslie or Denise, who
really need help.
- Why Unemployment Benefits Better for the
Deficit The Wall Street Journal's Alan Blinder writes, "not all
dollars are created equal. To take a very relevant example, consider
three different ways to add a dollar to the budget deficit: increase
unemployment benefits by $1, give a $1 tax cut to someone earning
$50,000 a year, or give a $1 tax cut to someone earning $5 million a
year. While the immediate impacts on the budget are identical, the
near-term spending impacts are not. The unemployed worker struggling to
make ends meet will likely spend the entire dollar right away. The
$50,000 earner probably will spend the lion's share of it, saving just a
bit—that's what most Americans do. But the $5,000,000 earner probably
will save most of the new-found dollar."
- Recall, Tax Expiry
Wasn't Democrats' Idea The Washington Independent's Annie Lowrey reality
checks, "look through Democrats’ budget proposals. Peruse the
House’s record for tax bills. By no means are Democrats proposing hiking
income tax rates. Taxes are due to rise because the trillion-dollar
cuts supported by the Bush administration and originated in a
Republican-controlled House in 2001 and 2003 had expiry dates — expiry
dates Republicans wrote in. Taxes will rise if Democrats take no action,
but they are
already planning to keep some, if not all, of the tax cuts for a few
years, until the recovery takes stronger hold."
- The Twisted
Dem Logic National Review's Veronique de Rugy writes,
"When supporters of stimulus-by-spending explain the New Deal’s failure
to end the Depression by pointing out that it was 'modestly
expansionary' because of the tax increases, isn’t that an argument for
opposing the expiration of the Bush tax cuts and asking the president to
give up on his planned tax increases?"
Bush's Cuts Were 'Fiscal Nightmare' The Washington Post's Ezra Klein writes, "as for the policy itself, it's a
fiscal nightmare: No one who professes concern for short-term deficits
can argue for the extension of these deficit-financed tax cuts and
retain credibility on debt issues. This is a litmus test. It's not
Democrats who are trying to pass the largest tax hike of all time, but
Republicans who are calling for the largest increase in the deficit in
Want to add to this story? Let us know in comments
or send an email to the author at
mfisher at theatlantic dot com.
You can share ideas for stories on the Open Wire.