Washington (CNN) - An emerging tax cut compromise could be to temporarily extend Bush-era tax cuts for all income levels, congressional sources in both parties told CNN Thursday.
Republican and Democratic sources say in this scenario - a short term extension across the board - both sides would be giving ground.
Democrats would compromise on their pledge to let tax cuts for the wealthy expire, and Republicans would give on their promise to make all tax cuts, including those for the wealthiest Americans, permanent.
On its face, the idea appears nonsensical, since Democrats and Republicans agree on permanently extending middle class tax cuts - for those making $250,000 or less.
But GOP sources in particular say keeping tax cuts for the middle class and the wealthier Americans linked may be in their best interest.
They say an idea that had been floating - to "decouple" - is untenable. Under that scenario, middle class tax cuts would be made permanent and tax cuts for wealthy Americans would be extended temporarily.
These GOP sources say that would put them at a political disadvantage in that it would make the discussion all about tax cuts for the wealthy. The sources also say tax cuts for the wealthy would be harder to extend in the future without being linked to middle class tax cuts.
These sources in both parties emphasize that talks have not yet begun in earnest, but the idea would be to extend all tax cuts at least for two years, through the next presidential election, and, they hope, until the economy gets better.
Meanwhile, if the two sides remain deadlocked, some Republican sources say it could be to their advantage to let the cuts expire at the end of the year - for what could be a few weeks - and then take the issue up when the new Congress convenes in January, when GOP lawmakers have more power.
It does seem clear that Democrats know they have a lot more leverage now, and it behooves them to try to cut a deal before the end of the year.
However, the question both Republican and Democratic sources are asking is whether liberal and moderate Democrats who were already divided on the tax cut issue can come together and agree among themselves now, never mind in negotiations with Republicans.
All the tax cuts should expire, we could not afford the 4 trillion added to the deficit in 2001 and we certainly cannot add another 4 trillion by 2020.
The tax cuts were set to expire in 2010 and we have ALL known that since 2001, LET THEM!
But no, the President caves in to the knuckle-draggers and let's these "fiscally responsible" tea baggers throw this country into another 4 trillion dollars worth of debt.
Remember all the whining about leaving a mountain of debt for "grandbabies"? Where are all these blue hairs NOW!
I will not support such a decision or an administration that allows it to happen.
If they have to take up the tax cuts again in January a lot of people willbe upset at the repos if they give cuts to the wealthy. So that may be a good thing. Tax cuts are inplace now do you see any new jobs??? Can't wait to see who the repos start blaming stuff on now. And they will have to get the new tea baggers in line. Nothing like having the majority of the congress with an IQ of 68 . Looks like the economy is picking up a little without the repos. Will they jump in now and take credit.
2% of the wealthiest people sure means a lot more to politicians than the remaining Americans.
This is mot the time to lower taxes what is this fear with taxes Clinton had high taxes and the country florished bush lowered taxes ten years ago and it was and still A disaster. How much more lesson should we learn before we finally figure out that it's not a good thing for the country. The government need money now to owed our debt crisis, they need revenue to put the people to rebuild our infrastructure to compete with the emerging e economic powerhouse coming up our rear. This will have the people working then they will get demand power to be customers to business so businesses hire people to help with the demand and start the capitalistic cycle up again.
Here is an idea for the Congress to figure into their entitlement cuts...why would you cut social security and Medicare when the people living on it are mostly the very people that paid in to the system and earned it? A good hard look at WHO is getting it and how they are getting it is most definitely justified however to cut seniors income that many are totally dependent upon does not seem quite the ticket for correction of the budget. Why wouldn't you cut Federal payrolls and Federal pension plans that are tax funded liabilities to the common citizens and why wouldn't you cut Federally funded State supplements that do the very same thing on the State level? What they are asking once again is for their people (Government employees) to be able to maintain their existing pay levels (excessive) and their existing pensions (dreamland) and benefits while main street citizens get absolutely NOTHING while being taxed to pay for the benefits that they will never see for themselves. I think I should run for office, my platform would be simple; I don't give a crap about you, I just want a pension and healthcare plan paid for by tax dollars, elect me!
So the bottom line is that Republicans will do whatever is best for their party. They want to make sure they are not blamed and do not want to be politically disadvantaged to look like they are only helping the rich. This pretty much sums up the Republicans, Party First !People Last ! All the Republicans pre elections lies are coming to roost already
"But GOP sources in particular say keeping tax cuts for the middle class and the wealthier Americans linked may be in their best interest."
And here I thought our congressional reps were supposed to work for what was in the AMERICAN PEOPLE's best interest. Silly me.
Obama here is a compromise since the tax cut didn't work for 10 years tell the repugs to let you raise it for five years with stipulation that if it's not working the they can look at it again after the election rather if he's the president or not. The repugs got 10 years to prove it doesnt creat jobs let see what 5 years tax hike will do. It is better to twinkle with something if it don't work in the position you thought it would work.
1. Explain what were are talking about is NOT a tax increase. Its a return back to the former tax code BEFORE the Bush tax cuts. Explain this was suppose to be temporary because we have no way to pay for it. That gives you the ability to tie this issue to the Deficit.
2. Explain that the tax adjustment would be on income made AFTER the 250K mark. Therefore, if you make 300K.. The tax rate adjustment is for the fund above 250 K. In this case, 50 K would be taxed to the original rate.
3. Push up the ceiling to 350K. Any person making above 350K per year is definitely well off regardless of their location.
President and Democrats.. get a back bone and GO FOR THE LAME DUCK session. YOU set the compromise at 350K, explain the connection to the deficit and go full steam ahead!! People are waiting on you to take control as you should. The election was NOT a mandate on Obama for this issue is what he ran on and partially why he was voted into office. GO FOR IT!
If the GOP believes that it could be to their political advantage to stall, they will do it. They will try to do what Rove wanted - get a permanent GOP majority. With enough GOP governors, that might be easier.
So, Repulicans are hypocrites about the deficit and Democrats are cowards in a showdown. Nothing new here, folks. Move along.
no comprimise, tax cuts for all.
End all the tax cuts. Go back to the pre -Reagan tax code and the balance will be budgeted. As a member of the middle class I would rather pay a few hundred more in taxes in order to end tax cuts for the rich. Raise the capital gains tax also.
No extension to the tax cuts that give companies tax breaks to send jobs overseas!!!!!!!!!!!!!!!!!!
For all of the folks this summer who backed the Tea Party and candidates, get out your hankies. Now, I guess Obama wasn't so bad after all. Social Security, medicaid, even taking a family trip to visit a monkey in a zoo is going to cost you big time.
If the GOP actually thinks that the American Public support a continued tax break for millionaires and billionaires, they are crazy. You can't have it both ways. If you want to cut benefits for the poor, than you have to cut benefits for the rich. I am disgusted with the thought that this tax cut for the rich is even being considered. But go ahead and do it and the whole lot of Democrats and Republicans that vote for it will be voted out next cycle.
Hmm... EVERYBODY pays the same rate on the first 250K sounds fair to me...
I sure hope people with 3 or more houses and cars and unlimited disposable income get an extension on their well-deserved tax breaks. After all, they work so much harder than the rest of us and NEED all the breaks they can get – while most of us can hardly make it to end of the month without an overdraft – fair is fair...
I call BS!!!!
"if the two sides remain deadlocked, some Republican sources say it could be to their advantage to let the cuts expire at the end of the year – for what could be a few weeks – and then take the issue up when the new Congress convenes in January, when GOP lawmakers have more power."
I completely agree. If they think just having the House "gives them more power", let's let em try. When it fails in the Senate and they all look like blundering fools in the next election, then the Dems can claim victory for the middle class, and more repugnants will have one of those "two year window careers"....
The reason why the GOP do not want to decouple the middle class and wealthy class tax cuts, is because any time a vote comes up to raise the taxes on the wealthy, they want to fool the middle class into thinking that their taxes will go up too. They constantly repeat the phrase "your taxes will go up" in media interviews, but they are only talking about the richest 2%. The other 98% think they are also talking about them.
"Trickle down" is a sham. It's just the rich pissing on the rest of us.
If the Democrats believe the tax cuts for the wealthy will increase the deficit by 700 billion dollars now is not the time for a compromise. As many people have noted, these cuts have not impacted the economy in a positive way so why extend them? President Obama and Democrats need to stand their ground on this one.
If grownups were in charge, the tax cuts would end and we might be able to reduce the deficit. Simple as that.
I can't believe people are still buying this trickle-down snake oil.
Clearly, the Bush tax cuts were not helpful, and primarily benefited the wealthiest Americans. Their aftermath is our current economic situation. So much for the promise of new solutions for our economy – this is the same tried and failed policy Republicans trotted out the last time around.
These tax cuts should expire as we were promised they would.
Besides, we were also told that giving more money to the wealthy would create jobs here in the United States, and as everyone can see, that has happened ...
Oh, wait ... my bad ...