Reports out of Washington are that efforts to extend the Bush tax cuts have stalled setting the stage for the largest tax increase in American history on January 1, 2011. According to Bloomberg, the average family would owe an additional $2,600 to Uncle Sam’s coffers if an agreement cannot be reached.
At the request of Republicans, talks have been rescheduled until after the Thanksgiving holiday which will leave law maker’s precious little time to strike a deal.
Predictably we’re hearing that extending the tax cuts will add further to the deficit, when in fact, every time taxes have been cut, receipts to the treasury have increased. Senator Mary Landrieu went to the Democrat playbook and played the class warfare card saying that she opposed financing tax cuts for high-income taxpayers with deficits.
Michigan Republican David Camp predicts that the issue will be delayed until next year, and if that happens, Republicans will push to make the tax cuts retroactive. Of course this will do little to soothe the nerves of already anxious small business owners who still do not know what their tax burden will be for 2011.
My prediction is that Democrats will attempt to attach legislation such as the Dream Act to extending the tax cuts in an effort to reach, what they believe, is a quid pro quo arrangement with Republicans. Senate Majority Leader Harry Reid resorted to this tactic prior to the midterm election when he attached not only the Dream Act to a defense appropriations bill but also a repeal of the Don’t Ask Don’t Tell policy.
We already know that Democrats will resort to the lowest forms of political chicanery to pass their radical agenda; is there any reason to expect they won’t do the same now? Especially in light of the fact that many outgoing lawmakers will be looking to go out with a bang.
Perhaps it will be best for everyone if the vote is put off until after the New Year but I doubt that President Obama will want to do this. It is in the president’s best political interest to extend the tax cuts this year even though they go against everything he stands for. If the president can foster a deal to extend the tax cuts, he’ll look like the knight in shining armor who saved the day which would go a long way to improving his dismal approval rating.