The NY Times has an article on the pending battle over the expiration of the Bush era tax cuts. Clearly we can no longer afford what we’re currently doing. The quandary is how far to go in reinstating parts of the tax cuts. The Republicans insist that it’s foolish to do anything short of 100% reinstatement, because of continuing weakness in the economy. That’s at odds with efforts to reduce the deficit.
As previously noted the GOP is schizophrenic about deficit reduction, insisting that $30 billion in unemployment benefit extensions be paid for with offsetting cuts, but $600 billion in expiring tax cuts should never need to be paid for because the tax fairy magically offsets it.
The Democrats favor leaving the cuts in place for individuals below $200k and families under $250k and allowing rates above that to revert to the 2001 levels. So we’re talking about a 4% increase in the highest bracket (from about 35% to 39%). The GOP casts this as economic apocalypse. I’m thinking the period of time when rates were at that level was a whole helluva a lot better economically than they are now.
