Extend the Bush Tax Cuts ... But Leave the Millionaires Out of It

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Democrats in the Senate and House are starting to coalesce over a plan to raise taxes only on the nation's 300,000 millionaires, according to the Washington Post.

The administration has fought to let taxes rise on families making more than $250,000 a year, a plan that would save the Treasury $700 billion over the alternative of extending the entire Bush tax law. This new proposal, endorsed by key Senate Democrats including Sen. Chuck Schumer and Robert Menendez, would save between $300 and $400 billion over a full extension.

Liberal Democrats have every right to kvetch. The administration and Senate Democrats have had months to settle on a strategy for killing part of the Bush tax cuts. But five weeks before the $4 trillion law expires, the nation is still on pins and needles to know what will happen with the the top rates. On the bright side, $400 billion is still a serious chunk of change -- more than the president's plan to freeze domestic spending for three years plus his plan to freeze federal pay for two years.

The Bush tax cuts have never been about liberal Democrats or conservative Republicans. The votes that matter are conservative Democrats in the House and Senate who could hold up any tax increase by siding with the GOP caucus. From that perspective, this strategy should look like a political winner. I'd say it's impossible to imagine any Democrat appearing on television to protect tax rates for millionaires ... but I've learned not to use the word impossible when writing about Democrats leaning toward the center right. Wait and see, is smartest conclusion I can offer.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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