Compromise on Extending Bush Tax Cuts Made Easy

Air Force One

The left has totally misconstrued this debate.
These are the likely compromise choices: extend the tax cuts for the rich temporarily and extend the cuts for the middle-class permanently OR extend both temporarily and fight about permanent extensions for the 2012 elections.
Obama's stance: Permanent extension of Bush tax cuts for the middle class.

The tax cuts expire at the end of the year. If they expire without an extension, temporary or otherwise, all of our taxes go up.
Obama is traveling and is in Japan now attending the Asia-Pacific Summit. He'll be back on Sunday.

Republican Stimulus: The Iraq War

The more I think about it, the more republicans must be ignored on the stimulus. They're offering ZERO, except the knee-jerk tax cuts. Spending is stimulus, says Congressman Barney Frank. He's right. Republicans are laughable. Here's a look at what's in the stimulus bill.

Obama: Middle Class Tax Cuts Coming Soon

CNN: Remember all the talk during the presidential campaign about a middle-class tax cut? It could be showing up in your paycheck early next year.

As the debate heats up over how to pull the economy from the ledge, it's likely that tax cuts for the middle-class will play a central role.

President-elect Barack Obama hopes to have a massive economic stimulus plan waiting for his signature when he takes office on Jan. 20. It's expected to include hundreds of billions in spending on infrastructure and green energy, but he also made clear last week that he wants it to also feature tax cuts to lower- and middle-income Americans.

Tax cuts are "part and parcel of what we need when it comes to stimulus," Obama said last week.

"We're going to be putting money in people's pockets so that they can spend on buying a new computer for their kid's school, so that they can, you know, make sure that they are able to deal with heat and groceries and all the other strains on the family budget," he added.

But Obama may hold off on reversing Bush's tax cuts:

One promise he made but may hold off on for awhile: the reversal of some of the Bush tax cuts for high-income taxpayers, who are roughly defined as individuals making more than $200,000 and couples making more than $250,000. Specifically, Obama has said he would increase the top two income tax rates and the capital gains rate to their pre-2001 levels.

What might the tax cuts look like?

So what kind of tax cuts are being considered? Obama's transition team isn't offering details yet and one Democratic aide on the Hill told CNNMoney.com that specifics have not yet been discussed.

But in talking about his economic recovery package, Obama has mentioned his campaign promise to offer a "net tax cut" for "95% of American workers."

One option that could get Obama a good way toward that 95% is his proposed Making Work Pay credit -- a centerpiece promise in his campaign. The credit would essentially work as a payroll tax credit equal to $500 for individuals and $1,000 for couples.

McCain's Perversion of Fairness

NYO: Let’s begin with the dishonesty of the McCain rant. What Mr. Obama proposes is to restore the tax rates on the wealthy to the same level as during the Clinton administration – that is, to allow the Bush tax cuts to expire without renewing them for individuals and families reporting more than $250,000 in annual income. There is nothing radical in this idea, let alone socialistic, (especially compared with the bank nationalizations and other violations of capitalist orthodoxy that Mr. McCain has supported recently as emergency measures).
Not only is there nothing radical about repairing the unfairness of those Bush tax cuts, but it is precisely the same position that Mr. McCain argued when they were first enacted. Is his memory so poor that he cannot remember saying that the Bush tax plan was “skewed” to benefit the rich? Having reversed that position for political convenience in the most craven way, he has also invented a different justification for opposing Mr. Bush back then – namely that he thought the cuts were fiscally irresponsible. But that isn’t what he said in 2000 and 2001.