Why tax cuts for the rich won’t expire

A majority of the American people favor allowing Bush-era tax cuts on incomes above $250,000 to expire and tax cuts on incomes below $250,000 to continue.  This is the position taken by President Barack Obama, House Majority Leader Harry Reid and House Speaker Nancy Pelosi.

So why was a tax law vote postponed until after the November elections?  It was a mystery until I read a post by Jonathan Zasloff on The Reality-Based Community web log.  He noted that Pelosi and Reid had these options.

1)  Bring up the middle-class tax cut bill free-standing in the House.  The Republicans would offer a “Motion to Recommit” to the Ways and Means Committee with instructions to include the tax cuts for the rich.  With Blue Dog support, it would have won.  No go.

2)  Bring up the middle-class tax cut bill freestanding in the Senate.  The Republicans would offer an amendment to include the tax cuts for the rich.  It could have won:  41 Republicans plus Lieberman, Lincoln, Pryor, Landrieu, Ben Nelson, Bayh, Hagan, Dorgan, Baucus, Conrad, and then maybe Bill Nelson, Webb, or Warner.  Then where would you be?

3)  Bring up the middle-class tax cut bill free-standing in the House under a “Suspension of the Rules,” which requires a two-thirds vote and is not subject to the Motion to Recommit.  My favorite option, because theoretically, the Republicans would be in a bind.  Either they would vote no, in which case they would have voted no on a tax cut, or they would have voted yes, in which case the Dems win and they tick off their base.  BUT — they probably would have split, meaning that the Dems would not have not gotten a win AND the partisan difference would have been muddied.

In other words, there was no way to get an actual win under these circumstances.  You could only get a loss that would muddy the partisan split.

Zasloff went on to say:

Under these circumstances, Pelosi and Reid decided not to have the vote.  Why?  Because you can still make the issue about it being the “Republicans holding the bill hostage.”  You can still say that the Republicans won’t vote for a middle-class tax cut unless they borrow $700 billion dollars to give to millionaires and billionaires.  President Obama still has the biggest megaphone in the country, and to his great credit, he is using it.  Just an hour or so after the decision was announced, he was blaming the Republicans for holding middle-class tax cuts hostage.

via The Reality-Based Community.

The alternative to raising taxes – or, rather, doing nothing and allowing taxes to revert to Clinton-era levels – is to finance government spending on a credit card for my niece’s and nephew’s newborn baby daughters to pay off when they come of age. It is not as if either party had a realistic plan to cut spending to fit revenues.

I personally think that the middle-class tax cuts should continue only until unemployment comes down to tolerable levels, and after that all federal income taxes – not just taxes on income above $250,000 – should revert to Clinton-era levels.  I don’t like paying higher taxes any more than the next person, but the generation that comes after me is going to inherit a big enough mess as it is.

But the question at issue is not what should be done.  Failure is a given, and the question is who is going to get the blame.  The choice is between the Democrats, who aren’t sure whether they believe in what they say, and the Republicans, who are strongly committed to ideas that haven’t worked.

Click on FactChecking ‘The Pledge’ for an analysis of the Republican Party’s “Pledge to America” released last week.

Click on Unpacking the Pledge for more analysis and links concerning the “Pledge to America.”

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