Democrats do not plan on reversing the planned end date for President Bush's tax cuts for the wealthy, which Republicans scheduled to sunset this year. But many in the GOP are now calling on Congress to pass an extension on the tax break, which is generating significant debate over the economic merits of reduce the tax burden on the wealthiest Americans during the recession. Here's what pundits, politicians, and even experts are now saying.
- 5 Myths About the Tax Cuts Click through to read the Washington Post's William Gale's debunking of each.
1. Extending the tax cuts would be a good way to stimulate the economy.
2. Allowing the high-income tax cuts to expire would hurt small businesses.
3. Making the tax cuts permanent will lead to long-term growth.
4. The Bush tax cuts are the main cause of the budget deficit.
5. Continuing the tax cuts won't doom the long-term fiscal picture; entitlements are the real problem.
- Extend Them for One Year, Then Reform The Atlantic's Derek Thompson advises, "extend the Bush law for one year and consider a more comprehensive tax overhaul in 2011." He explains, "the White House expects to take on broader tax reform next year, as Geithner also noted yesterday. Tax reform on par with 1986 -- that is, something like the Wyden-Gregg proposal to lower rates and broaden the tax base by eliminating deductions -- is holistic. It touches on everything. So it doesn't particularly matter what Congress does with the Bush tax cuts in 2010's lame duck session."
- Palin: 'Idiotic' To End Tax Cuts Sarah Palin said on Fox News Sunday that it is "idiotic to think about increasing taxes at a time like this" and that cutting them will "lead to even fewer job opportunities for Americans."
- Greenspan: Extending Cuts Would Be 'Disastrous' Former Fed Chairman Alan Greenspan said on Sunday's Meet the Press that extending the Bush tax cuts without offsetting the costs elsewhere could end up being "disastrous" for the economy. "I'm very much in favor of tax cuts but not with borrowed money and the problem that we have gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money."
- What We Could Buy Instead Center for American Progress' Pat Garfalo explains, "Extending just the cuts for the wealthiest two percent of Americans will cost $830 billion over ten years." He quotes colleague Michael Linden, "to put that figure in perspective, $830 billion is enough to pay for all veterans’ hospitals, doctors, and the rest of the Veteran’s Affairs health system, plus the United States Coast Guard, plus the Food and Drug Administration, plus the operation and maintenance of every single national park for the entire 10-year period — with more than $100 billion left over."