Political leaders spent the day Monday debating one of the most divisive issues in national politics &- the ever-controversial topic of tax cuts. With President George W. Bush's tax cuts for the entire population on the verge of expiration, Republicans and Democrats have started squabbling over whether or not they should be renewed, and for whom.
President Barack Obama is in favor of extending the tax cuts for households with an income of $250,000 or less, but letting them expire for the wealthiest three percent of Americans. Many Republicans and a few Democrats have demanded the extension of the tax cuts for all, while House Republican Leader John Boehner has said that he will vote for Obama's plan if there are no other options.
Obama's plan is the best compromise in this polarizing situation. Letting the tax cuts end for everyone would risk plunging the country further into recession, with families and individuals being forced to curb spending if more of their incomes are taken away. Reinstating the tax cuts for everyone, on the other hand, would cost the government $4 trillion over the next 10 years, according to congressional estimates, with $700 billion of that number accounting for the wealthiest three percent of Americans. With the country's budget deficit at $91 billion, the nation cannot afford to continue extending these tax cuts without the deficit suffering even more.
Defendants of the tax cut extensions for everyone claim that ending the tax cuts for the wealthy would just hurt the economy further by causing the rich to spend less. In reality, the effect of this would most likely not be that drastic, as those making over $250,000 a year will still have enough money for significant spending.
As with any issue that elicits strongly opinionated reactions, the best solution lies in the middle. Although we cannot reasonably afford to continue giving tax breaks to those who can afford to live without them, we also cannot take an increased income tax from the middle class in a time of such economic trouble, no matter how much we need to control the deficit.
Obama's plan makes sense because it finds a middle ground. Boehner was right to agree to voting for the plan, even if it is not necessarily exactly what he wants. As for all of the Republicans and Democrats who are threatening to block progress if they don't get exactly what they want, they could certainly learn a lot about the art of compromise.
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