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More Tax Cuts for the Rich? No Way! -- 6 Key Points About the Tax Debate Raging in Washington

Extending Bush's tax cuts for the rich over the next decades is just a terrible idea, and will do nothing to stimulate the economy.
 
 
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Washington is engaged in a noisy fight over extending George W. Bush’s “temporary” tax cuts, set to expire at the end of the year.

The battle lines are clearly defined: President Barack Obama and the Democratic leadership are pressing to extend the cuts that put some money into the pockets of the middle class and let those for the top of the heap expire on schedule. House Minority Leader John Boehner, R-Ohio, said this week he might go along with that plan, but Senate Minority Leader Mitch McConnell, R-Kentucky, joined the rest of the GOP caucus in insisting that the cuts giving huge breaks to the rich be continued indefinitely as well. Some Blue Dogs have said they’d prefer to keep the break for their wealthy patrons in place, and Ben Nelson, D-Nebraska, arguably corporate America’s most reliable mouthpiece in the Senate, has signaled that he may join a Republican filibuster to block passage of any bill that allows them to expire.

National polls -- six of them in recent weeks -- show that the American people are firmly on the side of the Democrats in this fight, but as Greg Sargent pointed out in the Washington Post , conservatives are betting that any discussion of taxes will feed into the wholly inaccurate narrative that "Democrats want to raise your taxes." “Republicans,” he wrote, “seem to be gambling that the nuance of the debate will get lost in all the noise, and people will see Dems as liberal tax-hikers even though they want to extend the tax cuts for the middle class.”

It may work. The corporate media is once again doing its typically horrendous job illuminating what’s at stake in the fight, and for whom. And Democrats are doing their typically pathetic job crafting a cohesive winning message. They’ve allowed the tax cuts, passed in 2001 and set to expire this year -- in order to get away with some parliamentary shenanigans in the Senate -- to be branded the “Bush tax cuts,” and the debate to center around whether to extend them or to “raise taxes.” The entire discussion would look very different if the administration had put together a package of cuts that target only the middle class, called them the “Obama tax cuts,” and then forced conservatives to oppose them.

But that didn’t happen, so we have another muddled debate over a significant matter of public policy. To sort out the fact from the fiction, here are some of the key issues underpinning this fall’s big tax fight.

1. The Rich Get Plenty of Relief from Those 'Middle-Class' Tax Cuts

The central point of debate on this issue -- tax cuts for the middle class versus those for the wealthy -- represents a false narrative. The “middle class” tax cuts give everyone a break, across the board, on their first $200,000 of income ($250K for married couples). What’s more, according to the Center for Budget and Policy Priorities ( CPBB), “high-income people actually receive much larger benefits in dollar terms from the so-called ‘middle-class tax cuts’ than middle-class people do.”

Specifically, recent estimates from the Joint Committee on Taxation show that extending just the middle-class tax cuts would provide more than $6,300 in tax cuts to households with incomes above $200,000, on average, compared to $1,132 in tax cuts for households with incomes between $50,000 and $75,000.

People making between $500K and a cool million would get a cut of $6,701 if the “middle-class” cuts are extended; if the cuts for the “wealthy” continue, they’d pocket an extra 10 grand, on average -- a cut of $17,467.

 
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