Tuesday, September 14, 2010

New Old Tax Cuts

Anyone following politics these days hears about taxes. Recently, discussion has often centered around the extension of the Bush-era tax cuts. For those who don't already know, President Bush enacted two large tax cuts in 2001 and 2003 which increased tax credits and changed tax brackets. Essentially, Bush's two tax laws reduced the amount of income taxes paid by the majority of Americans. For the upper and upper middle classes, the small change in tax rate saved many people thousands of dollars. These two tax cuts are set to expire with the new year, unless they are extended by the current Congress. Thus, the controversy.
In current economic times, neither party wants to be known as the party that reduced tax cuts, making Americans pay more of their income to the government. However, the Democrats argue that the tax cuts have substantially increased the federal deficit over the past few years as a result of lessened income. In order to protect both the struggling middle class and the bankrupt government, Obama and the Democrats are proposing an extention only to the tax cuts for the middle class, thus excluding the 3% of Americans who earn more than $200,000 per year. Republicans, however, are generally strongly supportive of extending the tax cuts for all Americans. Recently, House Minority Leader John Boehner has said he is willing to vote for an extension of the middle class tax cuts without the accompanying upper class tax cuts. Though he also states it is a "bad policy," Boehner admits that continuing tax cuts for the middle class is better than none at all. His new stance on the issue is at odds with both his previous statements and his party's general opinion.
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Does this change in Boehner's stance reflect an underlying willingness to compromise, or a political move to ensure success in the upcoming primaries? Perhaps more importantly, does it matter?

2 comments:

Charlie Pai said...

I like this guy. Politicians need to learn to compromise like Boehner. In our present day, the people have a low opinion of Congress mostly because it gets nearly nothing done. However, it is the stubborn blockage of other parties' bills that makes Congress dysfunctional. If people can learn to compromise, perhaps Congress could perform its job better.

This is especially relevant if both parties accept one part of the bill. Why not vote for this first, then argue about the upper class, or get something partially done versus nothing done? Boehner has the right idea.

Ayaka Chin said...

I am glad to see that Boehner is willing to admit "bad policies" and take the side that he feels is right. As Charlie said, the clash between the two parties makes congress ineffective and a move like this may get things moving.Therefore, it is nice to know that someone actually cares about the people. But I cannot ignore the fact that the this might be a political move on Boehner's part. It may not (and I hope it is not) be a solely political move to score points for himself in the upcoming primaries but, as mentioned by Kathy, no one really wants to take the blame for taking money out of the hands of the peole who really need it in this economy. I think it is safe to say that there was some kind of politiical tactics behind supporting the Democrats in their proposal to extend the tax cuts for the middle class.