Think the election will determine the fate of the Bush tax cuts for high income earners? That’s not necessarily a safe bet.
House Speaker John Boehner (R-OH) won’t say whether Republicans will relent on the issue if President Obama wins a second term. And House Minority Leader Nancy Pelosi (D-CA) says Democrats will still fiercely oppose extending all the Bush tax cuts if Republicans clean up in November.
Asked at his Thursday Capitol briefing whether he’d continue to oppose delinking tax cuts that only benefit people making more than $250,000 from the rest of the Bush tax cuts, Boehner demurred.
“Listen, raising taxes in a weak economy is not going to help create jobs in America,” he said. “We believe that extending all of the current tax rates is the appropriate course of action. And our proposal would be to extend them all for one year so that we can provide time for us to do real reform of the tax code, both corporate and personal.”
President Obama’s explicit offer to Republicans is straightforward: Both parties agree that the Bush tax cuts on everybody’s first $250,000 in income should be extended for one year. Republicans also want to extend the tax cuts for income above that threshold. Whether Congress passes the middle-income branch before the election or not, Obama wants the results in November to determine what happens to tax cuts for wealthy earners.
Boehner’s answer suggests Republicans will be reluctant to allow the top-bracket cuts to passively expire, even if Obama secures re-election.
Two can play at this game though. Asked if Democrats would agree to extend all the Bush tax cuts if Republicans win in November, Pelosi was categorical.
“No. You mean the tax rates put in place by the Bush administration that increased the deficit and did not create jobs, and got us into the fix that we are in now? No,” she said at her weekly Capitol press availability. “I remind you that going back to the Clinton rates for these folks would be a very good thing for the country. Just to remind, when President George W. Bush took office the unemployment rate was 4.2 percent. When he left it was almost double that. And these tax cuts at the high end were not helpful in terms of deficit reduction or job creation.”
Her declaration is significantly less relevant. Democrats are a minority in the House and wouldn’t be able to stop Republicans from passing high-income tax cuts if Mitt Romney wins in November. As House Speaker, Boehner would still have complete control over the fate of those tax cuts after an Obama victory.
