Top Republicans called on Democrats in Congress and the White House to extend all the tax cuts that are set to expire at the end of this year.
Sen. Judd Gregg (N.H.), the top Republican on the Senate Budget Committee, joined House Minority Whip Eric Cantor (R-Va.) in pushing for the extension of a series of taxes set to expire at the end of this year, including a series of cuts for households making more than $250,000 per year.
“If you want to do something to stimulate the economy, you could make clear that tax rates aren’t going to go up at the end of the year,” Gregg said during an appearance on CNBC. “If this administration really wants to stimulate, say they’re going to continue those tax rates — all those tax rates.”
The tax cuts on income and dividends that Republican Congresses had approved during the administration of President George W. Bush are set to expire at the end of 2010.
Sen. Byron Dorgan (D-N.D.) suggested on Friday that Democrats would look to extend some of those tax cuts, most likely for households making less than a quarter of a million dollars, while letting taxes for households earning more than $250,000 spring upwards to rates preceding the Bush tax cuts. Dorgan also said it was likely that Democrats would allow the dividend rate to appreciate, but only to 20 percent, instead of the 39.6 percent rate where it stood before it was cut.
“We’re all about trying to keep the current law as it is, and not allow the administration to raise these taxes,” Cantor said on CNBC. “Now what we’re continuing to hear out of the White House is that they’re going to want to make those rates — keep them as they are for folks making under $250,000 a year, and then taxing everybody else above that, raising them back up.”
Extending the tax cuts, in part or in whole, makes for tough choices for lawmakers. Current budget figures count on the tax rates rising upward at the end of the year, meaning that extending the cuts could exacerbate the budget situation unless they’re offset by cuts in spending. Additionally, any vote on those taxes could clash with recommendations from President Barack Obama’s fiscal commission, which is set to issue recommendations on how to shore up the long-term budget situation at the end of the year.
Obama has also promised not to raise taxes on households earning less than $250,000 a year, putting pressure on Democrats when it comes to tax votes.