Democratic Appeasement in the Fight to Extend the Bush Tax Cuts

Jenny Erikson
Jenny Erikson
With only three weeks left until the Bush tax cuts are set to expire, Congress is scrambling to save taxpayers from the largest tax increase in history. There have been several proposals tossed around on the Senate and House floors, including extending the cuts only for those families making under $250,000 or individuals making under $200,000 per year.

It appears as though Bush’s tax cuts benefited the non-wealthy after all. Even Obama had to admit that the average American family profited from Bush’s tax policies:

Make no mistake: Allowing taxes to go up on all Americans would have raised taxes by $3,000 for the typical American family. And that could cost our economy well over a million jobs.

Last Saturday, the House passed a bill that would increase taxes on "wealthy" Americans only, but five Democrats in the Senate joined with the Republicans to kill it. Our politicians had to go back to the drawing board.


The current deal that has yet to be voted on is Obama’s compromise with Republicans. If passed, Bush’s across-the-board tax cuts will be extended for two years (with the exception of the inheritance tax, which will go from 0% to 35%), and the payroll tax would be cut by 2%, benefiting every working American. In exchange for the concession, federal unemployment insurance would be renewed for 13 months.

Some Democrats are livid over the idea of a "tax holiday" for all Americans, and are asking Nancy Pelosi not to move the bill for a vote. No vote means taxes will go up for everyone starting January 1.

On the right side of the aisle, a few Republicans aren’t satisfied with the compromise either. Senators Jim DeMint and Tom Coburn have expressed their dissatisfaction with the deal, and are expected to defect from their party in what would mostly be a symbolic gesture, as the votes are most likely there to pass the legislation without their help.

Senator DeMint voiced his concerns:

[W]e don’t need a temporary economy, which means we don’t need a temporary tax rate. A permanent extension of our current tax rates would allow businesses to plan five and ten years in advance, and that’s how you build an economy.

While I agree with the Senator in principle, his proposal is impossible in practice. The Democrats still control both houses of Congress, and even when the new class takes over in January, they will retain control of the Senate. Not even Bush himself could get permanent tax cuts passed in 2001 and 2003 when the Republicans were in charge, so how does Senator DeMint expect a Democratic congress and a Democratic president to pass it?

Republican naysayers also don’t like the idea of extending unemployment benefits without the money to pay for them. Why not cut some of the runaway pork barrel spending? The savings from cutbacks to bloated government programs could then be used to fund the extended unemployment benefits.

Let the Democrats have their unemployment benefits, and let them come up with a way to fund them without increasing taxes on businesses that are suffering greatly in this shoddy economy. Without an extension of the Bush tax cuts, even a temporary one, who knows how many more people will lose their jobs?

Compromise is not a dirty word. This is the first step on the road to recovery. Let’s not miss the turn.


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