A key moderate Republican today indicated she might be open to the idea of a permanent extension of middle-income tax cuts, even if tax cuts on the top income brackets are only extended temporarily.
In response to questions from TPM, Sen. Olympia Snowe (R-ME) said she hasn’t reached any conclusions about whether she might support such a compromise, but did acknowledge that she has no objection to the idea of a permanent tax cut for middle-class Americans.
“I don’t know. I’m not prepared to say that at this point, frankly. I’d like to see all the tax rates extended for the time being, the next two or three years at the minimum probably, given where we are today,” Snowe said.
Pressed, though, Snowe acknowledged that she has no objection to extending some of the tax cuts permanently.
“I don’t have any objections obviously,” she admitted. “I’d like to consider the totality… I don’t want to comment on something I haven’t seen.”
(Snowe took questions from a handful of reporters outside the Senate chamber, after the GOP and Democratic caucuses met to hold leadership elections.)
Here’s why this matters. Republican leaders want to see all of President Bush’s 2001 tax cuts extended permanently. But inasmuch as they’re willing to compromise, they’ve drawn the line at extending all the cuts for the same amount of time. They’re opposed, in other words, to the White House’s idea of “decoupling” the lower and upper bracket tax cuts, so that the lower bracket cuts can be extended permanently. Why? Because they don’t want to return to this issue in two years and have to fight publicly for more tax cuts that benefit only the wealthiest Americans.
Snowe’s indecision on this suggests that moderate Republicans might not be eager to stand with their leadership and block a permanent extension of middle-income cuts over what ultimately amounts to differences over legislative strategy.
“More than anything else it’s critical that an accord is reached on this issue. It’s timely, it’s urgent, it’s imperative for the economy,” Snowe said.
Though she’s not showing her hand on the question of decoupling, Snowe did shoot down another compromise, floated by Sen. Chuck Schumer (D-NY) to create a new tax bracket at $1 million, and return tax rates on income above that level to Clinton-era levels.
“On the question of the wealthy, it has to get back to economic activity and economic growth and who, as well, pays those taxes, and that is, of course, small business owners, the preponderance of whom file individual tax returns,” she said. “So it does effect them.”
