As we know, President Obama, with the support of most Democrats in Congress, has proposed extending the Bush-era tax cuts to all but wealthy taxpayers. The cutoff was at $200,000 yearly income for individuals ($250,000 for couples), meant to give tax relief to lower and middle-class (and, I suppose upper-middle-class) Americans as part of the stimulus relief package.
Republicans oppose this: they want everyone, even billionaires, to keep their breaks.
As The New York Times reports, Obama’s plan has failed in the Senate: the vote was 53-36 in favor of the Obama bill, seven votes short of the 60 it needed to advance. The bill had already been approved in the House.
Democrats, including Mr. Obama, had long questioned the economic basis for lower tax rates on the wealthiest Americans, particularly at a time of deep concern over the nation’s rising debt. White House officials said the revenue lost to tax cuts for the rich would be better spent on tax breaks for the middle class and businesses to help spur growth.
Republicans insisted that allowing the tax rates to expire for the top two income brackets would amount to a big tax increase on small businesses, which generate many of the nation’s jobs — an assertion many economic and tax analysts say is largely baseless.
The assertion is based on the number of taxpayers who report nonwage income on their tax returns, but most such income does not come from what are generally regarded as small businesses.
(Note: it would be nice to have this kind of fact-checking in science journalism!)
Republicans just have to have their tax breaks for the rich, despite any evidence that extending the previous cuts for to the wealthiest would have any salutary effect on poorer Americans or the economy as a whole. They just want the wealthy to be able to keep forever what they got before.
The drubbing Democrats took in the elections, as Republicans won a majority in the House and picked up six seats in the Senate, further undermined the Democrats’ negotiating position. Republicans have since viewed an extension of the lower income tax rates as a foregone conclusion.
To speed up what they viewed as the Democrats’ inevitable capitulation, Senate Republicans said they would block virtually all legislative business on the Senate floor until the tax debate was resolved and a temporary spending measure had been adopted to finance the government.
Yes, by all means, let’s just shut down the whole goddamned government until Obama and the Democrats give in on this totally symbolic issue. Really responsible governance. (Republicans, of course, have proposed no viable solutions for our economic difficulties).
This is only the beginning of the political hell we’re going to have for at least the next two years.