This is a bad way to start a public debate over how to handle the expiring Bush tax cuts. In an opening salvo, Republicans on the House Ways and Means Committee charge today that Democrats “…are now plotting the largest tax increase in history for American families and small businesses: a tax increase of over $200 billion next year alone and $3.8 trillion over the next ten years.”
An accompanying chart provides a long list of the tax hikes that Democrats are allegedly planning, from higher rates in each tax bracket to a reinstatement of the marriage penalty.
Nonsense. The alleged tax increases are based on the assumption that all the Bush tax cuts expire at the end of this year. But President Obama has steadfastly called for permanently extending all the tax cuts for families with incomes below $250,000 and individuals with incomes below $200,000. That’s all but two percent of taxpayers.
The reinstatement of higher personal income rates and elimination of other tax cuts for people at the top is projected to cost $687 billion over 10 years, not $3.8 trillion. Nobody in the Obama administration and no remotely senior Democrat in Congress is proposing that all or even most of the Bush tax cuts expire at the end of this year.
Republicans argue that even those tax increases on the wealthiest Americans are too much, while many Democrats argue they are too small to make a dent in deficits over the coming decade. But that is an entirely different debate, and it has barely begun. Congress will have to act by the end of the year. But for Republicans to simply declare that Democrats are "planning" to let all the Bush tax cuts expire on January 1 suggests that it's not going to be pretty.