An interesting story caught my attention today. McClatchy reports that the Democrats are unlikely to repeal the Bush tax cuts. The whole thing is so deliciously stupid but this part really sums it up:
“Democrats in Congress are poised to play a leading role this month in thwarting their party’s effort to raise income tax rates on the wealthy.
Tax cuts enacted in 2001 and 2003 expire at the end of this year. President Barack Obama and Democratic congressional leaders have been eager to extend the breaks for individuals who earn less than $200,000 annually and joint filers who make less than $250,000. Those who earn more would pay higher, pre-2001 rates starting next year.
However, a small but growing number of moderate Democrats are balking at boosting taxes on the rich. Many face electorates that recoil at the mention of any tax increase. Some represent areas that are loaded with wealthier taxpayers. Further, some incumbent senators who don’t face voters this fall are reluctant to increase taxes on anyone while the economy remains sluggish.
Without their support, the push to raise rates on the rich probably will fail.”
This is the kind of “reporting” that I hate so much. I’m surprised it didn’t run in Politico. Unless I am completely wrong (a very real possibility) my understanding of the current situation is this: the tax cuts signed into law by Bush – the ones that overwhelmingly went to the very richest Americans and heavily contributed to our current debt situation – are set to expire at the end of the year. The reason this will happen is because the Republicans used reconciliation to pass the tax cuts because they didn’t have enough votes to pass the law the original way (ironically, this is the same tactic the Democrats ultimately used to pass the health care law). So an increase in tax rates is the default scenario.
This means that all the Democrats have to do to let the cuts expire is… nothing. Now, ideally, they would like to extend the tax cuts for all but the top few percent in income, which would require passing a new law and running into new difficulties. But still, extending the massive tax cuts for the rich will require a new law no matter what. The article above makes it sound like the balking of a few “moderate” senators is enough to deny liberals what they’d like to see. But this isn’t the typical situation we’ve seen so many times so far since Obama became President. This isn’t the health care debate all over again, where a supermajority is needed to get anything done. Unless there are 60 votes to extend Bush’s tax cuts, and unless Obama signs that bill into law, the tax cuts for the wealthiest will end. And if that actually were to happen, and the Democrats led the way to keep the tax cuts in place, then this country is wayyy more fucked than I realized.