Defining Up the Rich: $500,000 is the New $250,000

Alice Rivlin, a member of the White House's National Commission on Fiscal Responsibility and Reform, says she spots a possible compromise over the Bush tax cuts. If Republicans and conservative Democrats don't want to raise taxes on "small businesses" making $250,000, let's raise the tax floor to $500K:

Ms. Rivlin said in an interview that lawmakers and administration officials should consider temporarily exempting everyone who makes less than $500,000-a-year from a higher tax threshold. This is higher than the $250,000 level the White House has proposed but less than the $1 million some lawmakers on Capitol Hill have recently proposed. There is also a large group of lawmakers who have said the tax cuts should be extended for all income levels for at least two more years.

You know my take here. The money we'd collect over the next two years by taxing millionaires at 1999 rates is peanuts compared to the 10-year cost of the entire tax cut. Extend and reform is still the only option that is politically palatable in the short-term and fiscally responsible in the long-term.

Read the full story at WSJ.