From an editorial in The New York Times on Tuesday:
Taxes are supposed to be complicated and contentious. Yet, speaking from the White House on Monday, it took President Barack Obama less than 15 minutes to make a strong and sensible case for letting the high-end Bush-era tax cuts expire at the end of 2012. Citing well-documented facts, he pointed out that tax cuts at the top have failed to promote economic growth and have blown a hole in the federal budget.
Under his plan, Americans who make more than $250,000 a year the top 2 percent of taxpayers would see their tax rates go back up next year to the levels from the Clinton years, while those making less than $250,000 the remaining 98 percent would have their tax cuts extended through 2013.
In calling for cooperation from Congress, Obama said that the point is to agree to do what we agree on: extend the middle-class tax cuts. As a matter of fairness and responsible policymaking, he said, the majority of Americans, and the broader economy, should not be held hostage to another debate over the merits of tax cuts for the wealthy.
Unfortunately, it is not a message congressional Republicans want to hear, committed as they are to preserving tax cuts for the rich at all costs.
But its a message that needs to be sent, loud and clear, over and over. There will never be consensus for solving the nations budget problems without first ending the lavish tax breaks at the top. In the near term, letting the high-end tax cuts expire would raise much-needed revenue without harming the recovery because tax increases on high-income Americans do not cut into consumer spending nearly as much as middle-class taxes. The revenue that could be raised $829 billion over 10 years would be a significant step toward reducing the deficit and financing programs to spur the economy.
Reverting to Clinton-era tax rates for those making more than $250,000 annually would mean increases in the top rates to 36 percent and 39.6 percent from 33 percent and 35 percent currently. No one is being bankrupted or punished. They are being asked to pay more after an extended period of super-low rates.
Republicans argue that letting the high-end tax cuts expire will hit small businesses and impede hiring. That is nonsense, and based on an overly broad definition of small business. Using a more reasonable definition, a recent Treasury analysis found that only 2.5 percent of small-business owners would face higher taxes.
The strength of Obamas argument is unlikely to sway Republicans. But hes right on fairness and the facts.