Republicans turning up the heat on tax cuts
An election-year debate over tax cuts and deficits is heating up as Republicans press for extending all of President George W. Bush’s tax cuts and Democrats debate what to do against the backdrop of a slow economy, huge deficits and feared shellacking in the November congressional elections.
House Speaker Nancy Pelosi said on Thursday that Democrats support extending tax cuts for the middle class, but allowing the tax breaks for the wealthy to expire in order to help bring down huge budget deficits.
House Republicans immediately fired off an email to reporters saying “Pelosi announces tax hikes on small business.” Republicans argue that allowing tax rates to rise on individuals making more than $200,000 and couples with incomes above $250,000 amounts to a tax increase on small business since many small entrepreneurs report business income on their individual tax returns.
Democrats have been divided over what to do about the tax cuts. At least three Senate Democrats have said they are in favor of extending all of them temporarily to help the tepid economic recovery take hold. But Democrats are also taking a lot of heat on the $1.4 trillion budget deficit and more than $13 trillion debt ahead of the election.
A new poll could help settle the debate. A Quinnipiac University poll released on Thursday said voters overwhelmingly believe lowering unemployment, which stood at 9.5 percent last month, is more important than reducing the federal budget deficit.
It might just boil down to whether voters believe Pelosi who argues that extending tax cuts for the top income brackets just helps the wealthy and does not create jobs, or whether they accept Republican arguments that allowing the top income tax rates to rise as scheduled in January will hurt small businesses, which are a major source of job creation.
Photo Credit: REUTERS/Jonathan Ernst (House Speaker Nancy Pelosi)