Democrats Unlikely to Repeal Tax Cuts for the Rich
Wednesday 01 September 2010
by: David Lightman | McClatchy Newspapers | Report

Sen. Evan Bayh (D-Indiana), who is not running for re-election, is among the Democrats who oppose repealing the Bush tax cuts. (Photo: studio08denver)
Washington - 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.
"The economy is very weak right now. Raising taxes will lower consumer demand at a time when we want people putting more money into the economy," said Sen. Evan Bayh, D-Ind., who isn't seeking re-election.
Democratic leaders still vow a big effort this month to boost the top tax brackets, now 33 and 35 percent, back to 36 and 39.6 percent, the rates that were in effect in the 1990s. Both House of Representatives Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., who faces a tough re-election fight, want a vote before the election Nov. 2.
"We still expect to have a bill on the (Senate) floor at some point in September," Reid spokesman Jim Manley said. "Whether Republicans will allow us to pass anything is a whole other story."
"The speaker and the president have been clear they want to extend the middle-class tax cuts because they have the greatest economic benefit," Pelosi spokesman Brendan Daly said.
Many Democrats and Republicans are eager for a tax cut battle, seeing it as emblematic of each party's economic principles.
"Now the administration is calling for a massive tax hike on small businesses in the middle of a recession," said Senate Republican leader Mitch McConnell of Kentucky, who maintains that higher rates on the wealthy would hit small business hard, a point the Obama administration disputes.
"So it's no surprise," McConnell added, "that most Americans think the country is on the wrong track and that Democrat policies have failed to do anything to fix their top concern, the economy."
Democratic leaders are convinced that voters won't buy that argument. Not only will the public back higher taxes for the rich, but "we have an opportunity to generate $700 billion that could go to deficit reduction and badly needed programs," said Rep. Raul Grijalva, D-Ariz., a co-chairman of the House Progressive Caucus.
The middle class-only extension is thought to have strong support in the House, where Democrats have a huge majority, but some Democrats are reluctant.
Rep. Gerald Connolly, D-Va., represents the northern Virginia suburbs of Washington, one of the nation's wealthiest districts. Median family income there in 2008 was $117,892, well above the national average of $63,211. He said that repealing the top rates would have political consequences.
"Sometimes we forget how we became the majority. We did it by winning some affluent districts," he said.
The bigger problem for Democrats looms in the Senate, where Majority Leader Reid's immediate problem is getting the 60 votes needed to cut off debate on the measure. Democrats control 59 seats, and at least three of them — Bayh, Ben Nelson of Nebraska and Kent Conrad of North Dakota — have signaled that they won't back a permanent repeal of the tax cuts for the wealthy.
They suggest a way out of a stalemate — temporarily extending all the expiring tax rates — but so far the leadership isn't going along.
Sean Neary, a spokesman for Senate Budget Committee Chairman Conrad, said the senator backed such an extension "for now."
"The general rule of thumb is that you do not raise taxes or cut spending during an economic downturn. That would be counterproductive," Conrad said.
Nelson also offered what's become the centrist Democratic mantra. He, too, said he'd back extending the tax breaks for the wealthy "for at least a period of time because raising taxes in a weak economy could impair recovery."
That stand could be even more popular with Democratic candidates for the Senate who aren't incumbents. The hottest races are in conservative states, such as Kentucky, where Republican Rand Paul and Democrat Jack Conway are battling for the seat now held by Republican Sen. Jim Bunning.
Of the expiring tax cuts for the wealthy, Conway spokeswoman Allison Haley said that he "believes we should extend them now, especially when so many Kentucky families and small businesses are struggling under this recession."
In Missouri, Republican U.S. Rep. Roy Blunt and Democrat Robin Carnahan are in a tight race. Despite a welcoming embrace with Obama at a Kansas City fundraiser in July, Carnahan said last week that she wanted to extend the Bush tax cuts for everyone.
"Now is not the time to raise taxes," she said.
In Indiana, U.S. Rep. Brad Ellsworth, D-Ind., who's seeking to replace Bayh, told the Evansville Courier & Press this summer that all the Bush-era tax cuts should become permanent.
That position makes sense, said Brian Vargus, a professor of political science at Indiana University-Purdue University Indianapolis, because Indiana is "an overwhelmingly Republican state ... and there is never support for taxes or public goods."
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Comments
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Can,t DEM even Do NOTHING
Thu, 09/02/2010 - 10:44 — Vic Anderson (not verified)Can,t DEM even Do NOTHING effectively?
fiscal diarrhea another
Thu, 09/02/2010 - 10:48 — Anonymous (not verified)fiscal diarrhea another function of democracy
So a decrease in consumer
Thu, 09/02/2010 - 10:49 — Anonymous (not verified)So a decrease in consumer spending by 2% of the population is going to stall the economy? The rest of us 98% will continue to spend everything we earn anyway. Stop the free ride for the super rich.
The tax cuts are set to
Thu, 09/02/2010 - 12:29 — Linda (not verified)The tax cuts are set to EXPIRE on their own - no need to do anything! That said, why let tax rates go up for the wealthy when you can squeeze the money out of the working stiffs by cutting Social Security benefits? The wealthy DO create jobs with their investment income. Unfortunately, those jobs are in China or India instead of in the US.
Obviously, we give all the
Thu, 09/02/2010 - 13:05 — radline9 (not verified)Obviously, we give all the money to the rich. It may destroy America, but why buck the trend?
Just curious: what is the
Thu, 09/02/2010 - 15:13 — Anonymous (not verified)Just curious: what is the net worth of each Democrat opposing repeal?
Recent news has it that most
Thu, 09/02/2010 - 16:22 — Krakatoa (not verified)Recent news has it that most businesses, small and large, are holding onto revenue rather than creating jobs for the unemployed or underemployed. In what way does this help the ever-shrinking middle class or working class?
Allowing tax cuts for the wealthiest two percent of Americans to expire would easily reduce deficits at least partially incurred by two intractable wars, GWB's elimination of Clinton's surplus, and the bailout of all things Too Big To Fail..
While the cost of living rises and wages decrease, it should come as little surprise that Republicrats and Demoplicans seek shelter in the shrinking center.
So it goes.
If the Democrats renew the
Thu, 09/02/2010 - 16:44 — billnbillieskid (not verified)If the Democrats renew the tax breaks for the RICH against the advice of major economists I will NOT vote for ANY Democrat EVER again! Do you hear me, Mr. President. Get your ducks in a row on this one or you and they are TOAST come November! What kind of idiocy is this that you would go against your base? Did you actually drink the swill at the "Tea Party"?
Every time I see one of the
Thu, 09/02/2010 - 17:43 — Eliot (not verified)Every time I see one of the commercials advertising no tax hikes for the rich I get nervous. Now this article comes out and my heart starts to race. Wtf is wrong w/the govt in our country that this isn't a done deal? It's like the Rich assume a new Law gas already been written into effect and are arguing points on its behalf. The Dems HAVE GOT TO BE IN ON IT!
There is spin upon spin upon spin going on here confused further by reporting from media news corps each w/their own agenda. It's maddening I tell you!
As said by Linda, current
Thu, 09/02/2010 - 17:58 — CynicalOptomist (not verified)As said by Linda, current law expires and rates revert to pre-cut levels (only 39% @ top marginal bracket from 35%) Only new law can change that. So this statement is absurd:
"Without their support, the push to raise rates on the rich probably will fail." Push to raise? Rates return to '90s levels without any pushing.
The premise of the article is wrong and the author should be ashamed for presenting such shoddy work.
CynicalOptomist - Actually
Thu, 09/02/2010 - 19:31 — CleverTitania (not verified)CynicalOptomist - Actually you missed that the point is how many republicans and democrats are calling this a 'tax raise' when it's not. It's just repealing a 'tax cut', and one that was a mistake to begin with. The author wasn't calling it a push to raise taxes, because that's the language the backers of an extension are using.
Plus, it's still a tax raise, even if it's returning rates to what they were before. That's why the dissenters are able to say it with a straight face. No matter the logistics behind this tax bill's history, the tax rates for those above a certain point will go up, even if it's just returning them from a point when they went down.
It takes your breath away;
Thu, 09/02/2010 - 20:02 — Bob (not verified)It takes your breath away; how corrupt our leaders are. Eisenhower, a very conservative Republican had rates at 91%; Reagan (who compared the Taliban he helped create to "the founding fathers")had them way higher than now & yes he raised taxes. The corporate/rich takeover of OUR government has been so complete we now have third world levels of corruption. Short of the revolution Jefferson said we would need, nothing will happen. If Obama was LBJ he would still be on the back of the bus; I didn't expect much but I did expect a little & got nothing. Pelosi has more cojones in her purse than all the male Democrats have put together; pathetic!
Totally agree with
Thu, 09/02/2010 - 20:11 — Douin (not verified)Totally agree with CynicalOptomist. Letting the senseless current law expire as it was written to do will not cause these bloodsuckers to Not create more jobs . The 2% of the Richest already Own everything they want and need nothing else. Hellfire, they have not created anything remotely resembling Jobs in this country for at least the last 10+ years, even With the Tax Cuts. Unless money is Circulated it might as well be in a Mausoleum.
How can anyone actually expect this Economy to come out of this Depression without Jobs and the money that will bring? Only a bunch of morons in our Congress, I guess.
The Corporations are busily occupied in giving Our jobs to Third World Countries so they can Add even more Wealth to their own damn bank accounts. They pay slave wages over there, plus they do not even pay Taxes on what they make, as their bottom lines swell. What is fair about that ?
We need to Fire every damn one of the People that are presently in Congress..leaving none there to continue to contaminate any..hopefully.. honest newcomers that we Might be able to entice to run for the soon -to-be vacated seats. That is also assuming that there are enough registered voters that will educate themselves to know who to vote for--- and will get out there and Vote.
Turn off Fox News, and Read, go to all Town Hall Meetings, Communicate with your friends and even your Neighbors. But please stop waiting for the MSM to tell you who to vote for , as their agenda is not in your best interests. Hasn't been ..in decades.
Regarding Billnbillieskid,
Thu, 09/02/2010 - 22:37 — Anonymous (not verified)Regarding Billnbillieskid, he got it right. I have already sworn to never vote for a Republican for any office ever again, and I am about to swear the same for the Democrats.
The Republicans seem to have the motto: "If you are not rich, hurry up and die!"
The Democrats seem to have the motto: "Please don't hit me..."
Some choice.
Pathetic. I try so hard to
Fri, 09/03/2010 - 06:59 — Andrew (not verified)Pathetic. I try so hard to see the good here, but, fear we are doomed. The dumbing down of America has really worked - if we really needed dumbing down in the first place. I wonder.
There will be grave
Fri, 09/03/2010 - 13:59 — Larry (not verified)There will be grave consequences for these hired pimps of the super rich . They have already allowed the USA to go bankrupt . They will get what they deserve , and soon !
Democrats would have to
Fri, 09/03/2010 - 16:42 — Anonymous (not verified)Democrats would have to construct a new law extending the tax cuts, because they expire after 2010. There's nothing to repeal. Either the tax cuts expire, or they are continued with new legislation. Any Democrats who want to create and pass new legislation authorizing a new period of the Bush tax cuts, should be replaced immediately.
Many good points in these
Fri, 09/03/2010 - 19:16 — bobo (not verified)Many good points in these posts especially in regards to a mass firing being in order. However, I think just giving out pink slips will do anything to help discourage similar behavior in the future. I'm picturing a scene not unlike the ending in Frankenstein. You know, an angry mob of several million waving pitch forks as they hurl torches at the capitol building with all the "Frankenstein's monsters" trapped inside.
What did we expect? Was no
Sat, 09/04/2010 - 10:39 — Anonymous (not verified)What did we expect?
Was no one watching the Democrats perform during the Bush years?
Well, here are those
Sat, 09/04/2010 - 10:48 — Anonymous (not verified)Well, here are those Senators who voted against Bush's "tax relief" in 2005, the hideous Bayh among them:
NAY:
Akaka (D-HI)
Baucus (D-MT)
Bayh (D-IN)
Biden (D-DE)
Bingaman (D-NM)
Boxer (D-CA)
Byrd (D-WV)
Cantwell (D-WA)
Carper (D-DE)
Chafee (R-RI)
Clinton (D-NY)
Conrad (D-ND)
Dayton (D-MN)
Dodd (D-CT)
Dorgan (D-ND)
Durbin (D-IL)
Feingold (D-WI)
Feinstein (D-CA)
Harkin (D-IA)
Inouye (D-HI)
Jeffords (I-VT)
Johnson (D-SD)
Kennedy (D-MA)
Kerry (D-MA)
Kohl (D-WI)
Landrieu (D-LA)
Lautenberg (D-NJ)
Leahy (D-VT)
Levin (D-MI)
Lieberman (D-CT)
Lincoln (D-AR)
Menendez (D-NJ)
Mikulski (D-MD)
Murray (D-WA)
Obama (D-IL)
Reed (D-RI)
Reid (D-NV)
Salazar (D-CO)
Sarbanes (D-MD)
Schumer (D-NY)
Snowe (R-ME)
Stabenow (D-MI)
Voinovich (R-OH)
Wyden (D-OR)
Not Voting - 2
Rockefeller (D-WV)
Specter (R-PA)
The term "tax increase" is
Sat, 09/04/2010 - 13:10 — Duke Nukem (not verified)The term "tax increase" is growing old. It's not increasing taxes, it's letting tax rates go back to what they were prior to the senseless and wreckless Bush tax cuts for the rich. The current animosity toward what many people perceive to be as high taxes (a good few who are against any taxes at all) is a classic example of either short term memory or just plain ignorance on the behalf of many Americans. Back in the 1950s and and 1960s, taxes on the richest in our country stood between 70 and 90 percent. That's when bridges and tunnels were being built, new highways and interstates paved, new power plants being built, new oil refineries. Our country was doing well. Fast-forward to now, after the "Reagan Revolution" and the Bush years that lowered tax rates on the rich- we now have a crumbling infrastructure, a failing education system, and an undying dependence on fossil fuels instead of converting to clean energy. People need to remember the plain and simple truth- taxes are the government's revenue. It's how we get things done. Less tax= less money into the government. If you cut taxes twice in the middle of two wars as Bush did, the government is spending a lot of money on those wars at the same time as not taking in as much money because the rich aren't paying their fair share. The term "tax cuts" is code word for cutting programs that help the working poor and the people out of work. Remember that.