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Don’t play chicken

http://savannahnow.com Republicans and Democrats in Washington must not play a risky game of chicken with the tax cuts that are set to expire on Dec. 31. If they do, all Americans will be dead ducks. In 2001, Congress passed the largest tax relief package in a generation, then extended these cuts in 2003. These measures – lumped together and called the Bush tax cuts as a form of shorthand – reduced income taxes, eliminated the marriage penalty, increased the child tax credit and ended the death tax, which required some estates to give up to 55 percent of their assets to the government. These tax breaks have helped hard-working Americans keep more of their money so they can support their families. They have helped large and small businesses buy the goods and services they need to grow and prosper. They have prevented the act of dying from becoming a huge cash cow for politicians. And it all ends when this year ends – unless Congress and President Obama do something about it. Mr. Obama and some Democrats have expressed interest in extending cuts that don’t apply to upper-income households (individuals who earn more than $200,000 annually and couples that earn $250,000). Soaking the rich, in other words, remains a top priority. Republicans want to extend the Bush tax cuts or make them permanent for all taxpayers. Politically, the latter isn’t going to happen. The GOP doesn’t have the muscle. Big spenders in Washington are happy to roll back the clock to the year 2000 and see Uncle Sam rake in more money. Not so Americans who pay the bills. If you’re a working parent who has been used to claiming a $1,000 tax credit for each child, get ready to fork over to the government an extra 500 bucks for each youngster. A huge fight is predicted before the November election. Some Democrats apparently want to let Republicans take the fall. In their eyes, the GOP is to blame for writing the sunset provisions into the law. At the same time, they need cash to plug that deepening budget hole. Republicans, meanwhile, have a partisan incentive to play hardball and blame Democrats for supporting higher taxes. Then the party might pick up more seats in Congress. A stalemate serves no one. Indeed, the smarter course is to extend all the tax cuts and credits for one year. Let the National Commission on Fiscal Responsibility and Reform, which Mr. Obama appointed, do its job on finding how to stop the bleeding and seemingly endless borrowing. Republicans squandered their opportunity to lead, running up spending when the GOP was in charge. Unfortunately, Mr. Obama and the Democrats are making that same mistake, running up record deficits that taxpayers can’t afford. Some Democrats may like the idea of a big gusher of new money in 2011. But it will come at the expense of a struggling economy and create more fiscal uncertainty. It also won’t solve the root of the problem – a federal government that is spending beyond its means.

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