Am"Bushed" by Taxes? Keep or Let Die the Decade-Old Tax Cuts?
House Republicans have announced legislative plans to extend the so-called Bush tax cuts beyond the end of 2011 during the summer. Eric Cantor (R-VA) argues that the largest tax increase in recent history would ensue if the cuts are allowed to wither away. Correspondingly, Minority Leader Nancy Pelosi (D-CA) proposes limiting the extension to only taxpayers with incomes over $1 million and using extra tax revenues to reduce the annual deficit. She argues that ending decade-old tax breaks for wealthy Americans would lead to the wealthy paying "their fair share." The Obama administration has proposed only extending the tax breaks for those earning over $250,000 and a number of influential leaders, including IRS Commissioner Doug Shulman, have encouraged Congress to address the tax issue before November elections to give taxpayers a chance to plan for any changes.
I actually considered agreeing with Ms. Pelosi (and immediately worried about my sanity) under the premise of making sure that the issue was addressed before December 31 (or even the second half of December). Guess here is that while spending cuts (or freezes) are essential to getting the U.S. Government's fiscal house in order and that such adjustments clearly need to be the primary focus of fiscal correction; nevertheless, limited tax hikes or AT LEAST ending of some tax incentives may be required to totally get the budget completely under control.