Bush Tax Cuts: Democrats Now Willing To Consider Compromise
By Jeffrey Paulsen on November 30, 2010, 7:32 am Posted in Finance News
Congressional Democrats are considering a new compromise on the extension of the controversial Bush era tax cuts, which are set to expire on December 31. Under the new plan, which has not been formally presented to Congress or the President, the Bush tax cuts would remain in place for households earning up to $1 million a year.
Political Gambit To Make GOP Show Cards
Democrats see the compromise measure as a way to force the GOP to take an unpopular stand defending millionaires.
Congressman Charles Schumer (D-NY) told the Washington Post, “There’s a strong view in the caucus that if we make the dividing line $1 million, it becomes a very simple argument: We are for giving the middle class a tax break; they’re for tax cuts for millionaires.”
Extending the Bush tax cuts another decade would cost around $70 billion dollars a year. Raising the threshold to $1 million earners would save around $30 billion a year over the next ten years.
Who Is Middle Class
While the compromise measure is being touted as a “tax cut for the middle class,” the question of, “who is middle class and who is rich?” has been central to the tax cut debate.
When initially introduced in 2001, the bulk of the Bush tax cuts benefited households making over $250,000 a year. As debate over tax cut extensions has intensified, some critics have pointed out that in many parts of the country, a person making $200,000 a year, or a household making $250,000 is middle class.
If the proposed compromise were enacted, it would mean only the richest 315,000 families would see a tax increase at the beginning of 2011.
GOP Leaders Voice Opposition
House Republicans immediately opposed the measure saying that raising taxes on anyone in the current economic climate would be disastrous.
Related posts:
- If Bush Tax Cuts Expire: Will They Affect Those Making $250K Or Less
- Bush Tax Cuts: Are Favoring Democrats Up For Reelection
- Small Business: Bush Tax Cuts Uncertain, Owners Remain On Fence
- Unemployment And The Economy: Bush Era Tax Cuts Divide Democrats
- Bush Tax Cuts: Democrats May Block Tax Cut Extension
