On tax week, Democrats and Republicans return to Washington gearing up for battle over dueling tax proposals. The separate votes this week will highlight a fundamental divide between the two parties, one that promises to define the choice in the 2012 election.
The Republican-led House is set to take up legislation, spearheaded by Majority Leader Eric Cantor, that lets businesses with fewer than 500 employees deduct as much as 20 percent of their 2012 business income. The bill is projected to cost $46 billion, and the tax benefits are tilted toward high earners, according to the nonpartisan Tax Policy Center.
Across the Capitol, the Democratic-led Senate is poised to vote Monday on “Buffett Rule” legislation that requires millionaires and billionaires to pay at least 30 percent of their income in taxes. The measure is projected to raise $47 billion over 10 years if the Bush tax cuts expire; Democrats say that number rises to $160 billion under current policy.
Neither bill is expected to become law, nor is meaningful tax reform expected to pass this year. The upshot, instead, is essentially to frame the 2012 election.
The Republicans’ goal is to paint themselves as tax-cutters as well as friends of small businesses. Democrats, frustrated with the GOP’s persistent refusal to accept new revenues in any deficit-reduction deal, plan to force Republicans to defend their anti-tax rigidity to its most extreme lengths.
David Axelrod, a senior adviser to President Obama’s reelection campaign, sought to draw the contrast with presumptive GOP nominee Mitt Romney, when asked about the bill’s limited revenue-raising capacity on Fox News Sunday.
“It’s part of an overall plan that will stabilize our debt and deficit,” he said. “We’re arguing for a system that is fair. He’s arguing for a system that would exacerbate the great gaps we have in our system today.”
RNC Chairman Reince Priebus insisted Sunday that the Buffett Rule is a distraction, and despite polls indicating broad public support for the principle, he said that Republicans are not on the wrong side of the politics.
“It’s all about dividing and conquering,” he said on CNN’s State of the Union. “This is a shiny object that Barack Obama wants the country to look at.”
