- The Washington Times - Sunday, August 1, 2010

Republicans and Democrats are in agreement on the fate of 97 percent of the George W. Bush-era tax cuts that are set to expire in January - it’s the remaining sliver that has spurred a bloody campaign battle that could feature prominently in the midterm elections.

Although Democrats have ripped Republicans for supporting relief for taxpayers in the highest income brackets, the GOP is not backing down, banking that the undiluted message of tax relief for all will prove a winner with voters come November.

“The fight is going to be Democrats taking a policy position that will cause taxes to increase with small businesses, and Republicans who are going to oppose that,” said David Winston, a Republican communications strategist and president of the Winston Group in Washington.

“Ultimately, that’s an argument that will favor Republicans,” he said.

Lawmakers are considering the renewal of tax cuts enacted in 2001 and 2003 under President Bush. The cuts for most taxpayers expire at the end of this year unless Congress and the White House act.

Lawmakers from both parties support proposals to renew the cuts for single taxpayers earning less than $200,000 and for couples making less than $250,000 a year.

But President Obama and most Democrats in Congress point to the need to address the federal budget deficit and are calling for the tax cuts to expire for those with incomes above the $200,000 and $250,000 thresholds, accounting for about 2 percent to 3 percent of the taxpaying population.

“I don’t see any reason why we should renew a tax cut that only gives a tax cut to the wealthiest people in America, increases the deficit, and doesn’t create jobs,” House Speaker Nancy Pelosi, California Democrat, said in an interview that aired Sunday on ABC’s “This Week.” “That doesn’t make any sense.”

Republicans want to continue the Bush tax breaks for Americans in all income brackets. They say that raising taxes on the highest earners would have a devastating effect on the economy, specifically job growth.

“We believe the pathway toward getting this economy moving again is fiscal discipline in Washington, D.C., and at a minimum preserving the tax relief of the recent past,” said Rep. Mike Pence of Indiana, chairman of the House Republican Conference.

“Raising taxes in the worst recession in 25 years is a profoundly bad idea.”

Republicans make the case that many small-business owners are in the high-end bracket and would face job-killing tax bills under the Democrats’ proposal.

“American families and small businesses are about to be slapped by the Obama tax hikes that will make it even harder for folks to make ends meet and kill millions of jobs,” said Sen. Jim. DeMint, South Carolina Republican. “The Obama tax hikes will hit all American taxpayers.”

House Republicans gleefully seized on comments from influential private economist and forecaster Mark Zandi, often cited by Mrs. Pelosi for his studies supporting the Democrats’ $862 billion economic stimulus package.

“I would not allow those tax increases to take hold on Jan. 1, either,” Mr. Zandi, chief economist at Moody’s Economy.com, said in an interview on PBS on Thursday. “I think the economy’s too fragile for that.”

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