Tax Lawyer's Blog

So much for courage of conviction.

Martin Vaughan writing for the Wall Street Journal says some Democrats want to extend the Bush tax cuts:

Some Capitol Hill Democrats want President Barack Obama to extend tax cuts for wealthy Americans now scheduled to expire at the end of 2010, arguing that a tax increase could hinder economic recovery.

Obama, of course, has promised to allow the Bush tax cuts to expire:

Asked in recent days about the tax cuts for the wealthy, administration officials have insisted that Obama won’t propose extending the tax cuts for the wealthy.

“That’s not something we have contemplated, and I don’t think that’s a necessary act,” Treasury Secretary Tim Geithner said in an interview with CNBC last week.

Here’s what the President wants:

Obama during the campaign and in last year’s budget plan proposed extending Bush tax cuts affecting the poor and middle class. He proposed letting the top two tax rates, now 33% and 35%, return to 36% and 39.6% respectively, in 2011.

This year, the top rate will apply to income above $373,650 for individuals and married couples. Under Obama’s plan, the 36%, second-highest rate would kick in at $200,000 for individuals and $250,000 for married couples.

Obama also proposed bumping the 15% rate on capital gains and dividends up to 20% for those with income in excess of $200,000, or $250,000 for married couples.

Could the shot fired across the bow in Massachusetts last night cause more Democrats to favor the extension of the Bush tax cuts?

Listen to Vaughan (emphasis added):

However, some Democratic strategists looking toward midterm elections see peril in heading into November with looming tax increases on the horizon. Tax increases may be a potent issue for Republican opponents as Democrats defend majorities in the House and Senate.

Rep. Harry Mitchell (D., Ariz.), a second-term congressman who held on to his seat in 2008 with 53% of the vote, wrote Obama last week asking him to extend the lower capital gains and dividend rate, and estate tax rates.

“Given the unique economic difficulties we face as a nation, this is the wrong time to raise these taxes. We need to retain these tax cuts that encourage investment that stimulates growth and job creation,” Mitchell wrote.

I expect to see a lot of congressional Democrats cowardly tiptoe from the herd as we get closer to the November elections. More evidence that most politicians would sell their sisters into the sex-slave trade if they thought it would get them votes.

(Hat tip: Paul Caron)

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