Posted on 06/22/2010 7:15:47 PM PDT by jazusamo
Democrats are looking at the possibility of raising taxes on families below the $250,000-a-year threshold promised by President Barack Obama during the election.
The majority party on Capitol Hill does not feel bound by that pledge, saying the threshold for tax hikes will depend on several factors, such as the revenue differences between setting the threshold at $200,000 and setting it at $250,000.
“You could go lower, too — why not $200,000?” said Sen. Dianne Feinstein (D-Calif.). “With the debt and deficit we have, you can’t make promises to people. This is a very serious situation.”
Sen. Byron Dorgan (N.D.), chairman of the Senate Democratic Policy Committee, concurred, saying, “I don’t think there’s any magic in the number, whether it’s $250,000, $200,000 or $225,000.
“The larger question is whether we’ll be able to extend the tax cuts for middle-income folks,” Dorgan said. “The answer, I expect, would be yes, but we don’t quite know how it all fits in the larger picture.”
Feinstein said the economy has not recovered as much as Democrats had hoped and uncertainty about the availability of credit remains a problem.
In the aftermath of the financial crisis in Greece, credit markets have been spooked by questions of whether nations will be able to pay their rising debts.
“We have to be very careful what we do to further reduce tax revenues,” Feinstein said.
Thus, raising taxes on families who earn between $200,000 and $250,000 has become more palatable among Democrats.
Federal spending and debt are widely, although not universally, regarded among economists as unsustainable.
Centrist Democrats and most Republicans demand that new spending be offset.
Democratic lawmakers want to shield middle-income families from tax increases, but they don’t necessarily put families making over $200,000 in that category.
“I’m not hard and fast on $250,000,” said Sen. Tom Harkin (D-Iowa). “Quite frankly, it could be somewhat lower than that. $250,000 — is that the top 1 percent of Americans, or half a percent? I mean, come on!”
Household income data compiled by the Census Bureau in 2008 shows that families earning over $250,000 fall into the top 2 percent.
House Majority Leader Steny Hoyer (D-Md.) hinted in a speech Tuesday that House Democrats do not consider family incomes of $250,000 an inviolable threshold, despite Obama’s pledge.
He said at the event sponsored by the Third Way think tank that “at a minimum,”the House would not extend the tax cuts to taxpayers above $250,000.
Hoyer argued that higher taxes would be necessary to address the $1.5 trillion federal deficit and downplayed threats that such action would hamstring the economic recovery.
He noted that tax increases in the early 1990s raised government revenues from 17 percent to 21 percent of gross domestic product and ushered in a decade of prosperity.
“Raising revenue is part of the deficit solution, too,” he said, adding that Congress must also cut spending.
Hoyer said a compromise to cut spending and raise taxes is the only deficit-reduction plan that has a chance of succeeding.
A bipartisan commission Obama established by executive order is scheduled to give its recommendations for reducing the debt by Dec. 1.
Erskine Bowles, co-chairman of the commission, said in April that the panel would consider a proposal to raise taxes on families earning less than $250,000 a year.
During an appearance on Fox News Sunday at that time, Bowles said the president told him that everything should be on the table.
Senate Republicans accused Democrats of breaking Obama’s campaign pledge.
“It is noteworthy that the Democratic leader, the majority leader of the House, is saying that we need to, in effect, raise taxes on the middle class, and the president ought to back off of that pledge as a way to get even more money to spend,” said Senate Republican Leader Mitch McConnell (Ky.).
“Clearly, that’s the wrong direction, and I don’t think that’s what the American people are asking for,” he added.
McConnell said Democrats are looking to raise taxes because they are having difficulty passing and paying for legislation such as extended tax relief and social safety-net provisions.
“The Democrats used all the revenue in this place on healthcare reform and they can’t do anything else unless there’s more revenue,” said a senior Republican aide.
Senate Democratic Whip Dick Durbin (Ill.) acknowledged that using popular offsets to pay for healthcare reform has made it tougher to find ways to pay for other legislation.
Senate Finance Committee Chairman Max Baucus (D-Mont.) said Tuesday that he has not even begun to focus on the thorny issue of extending Bush-era tax cuts for families earning less than $250,000.
“We’re not looking at that now,” Baucus said.
Sen. Jeff Merkley (D-Ore.) circulated a flier among colleagues at lunch Tuesday urging them to sunset tax cuts for families earning $250,000 and above. The memo stated that allowing the tax cut that Republicans passed in 2001 to expire would generate $700 billion in revenue.
Of course Obama would honor his promise and veto any such legislation. /sarc
It's only fair.
Democrats are just flat out liars and thieves. They don’t even pretend otherwise anymore.
“With the debt and deficit we have, you can’t make promises to people. This is a very serious situation.”
These people are certifiable.
STOP SPENDING!!!
November gets closer with each passing day...Dems....
What goes around comes around, bet.
“Read my lips” had a devastating effect on President George H. W. Bush. This Democrat reversal on tax policy? {shrug} It’s no biggee.
“This is a very serious situation.”
Agreed. So repeal the stimulus spending program. And then lop 10% off every federal budget except defense.
Please, please, please do it you donkeys. I can see November from my house.
Didn’t see that coming.
Pray for America
“Read my lips...”
How did that work out for Peggy Bush?
This is the great misconception of the American left. The economy didn't grow because of the Clinton tax increases, it grew in spite of it. The economy exploded in the 90's due largely to two things - free trade and the ubiquitous distribution of the personal computer and internet.
Businesses used the power of the pc and internet to drive productivity to previously unattainable levels. Free trade allowed prices to remain low and push back inflation even in the face of fierce economic growth. We can't repeat the past - the PC is already here as is free trade. We are in a new paradigm and there's nothing on the horizon that can be see that will spur economic activity, not for the foreseeable future. We're screwed and increased taxes will only make things demonstrably worse.
Yo! LIEberals!
All your 2010 House and Senate seats are belong us!
Anyone who believed Soetoro’s “no raised taxes” pledge is either naive or a complete fool, there is no third choice.
This was the plan all along and Obama was in on it.
Yep, but try telling that to a liberal.
They thrive on the inconceivable doing the impossible.
Why not $174,000?
Yep..... nice number.
It catches at least another 535 people in it’s net.
As I sit here tonight thinking about it, I don’t see how we can get beyond the fact that we now have a huge voting block in this country who think that they are entitled to the efforts and earnings of others.
At some point, either we have a swing towards more sanity and away from socialism, or we will begin to break apart from within from factional resentment. Democrats, and more specifically liberals, are sowers of hatred and envy, and among the most divisive and destructive groups ever encountered in human society.
Though I know little about economics I couldn't agree more and do know the out of control spending has got to stop!
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