It is difficult for me to understand why Congressional Republicans are electing to walk into a trap. Surely they know that if they refuse to agree to tax legislation by the end of this year, they will be widely blamed by the American people for the mammoth detrimental consequences that ensue, which will affect most of us.
President Obama reluctantly agreed to extend all of the George W. Bush tax cuts, including those for high-income Americans, for two years, which takes us to the end of 2012. He made it clear at the time that he would not agree to another extension, instead favoring a plan which would retain the cuts for families earning $250,000 per year or less. Many Congressional Republicans refuse to sign on to a tax increase for any American. U.S. House Speaker John Boehner sought what he saw as a compromise vote in the Republican-controlled House which would increase taxes only on those families with more than $1 million of annual income, and even that measure could not garner sufficient GOP support, Boehner having to retreat and yank the bill prior to its presentation. The Speaker then gave up, stating,"God only knows how we get there (to a deal)."
Members of Congress have fiddled while the nation burns, now imperiling the many large groups whose benefits will expire in less than a week: individuals that rely on the child tax credit, those receiving extended unemployment compensation benefits, those subject to the federal income tax and Social Security payroll tax, and 25 million more Americans that will be subject to the onerous Alternative Minimum Tax if action is not taken to provide yet another "patch" to restrain its reach.
We have a system of income taxation that is a complex, arcane, inane, incomprehensible mass of tens of thousands of pages. So unwieldy is it that those that the "experts" that are paid to interpret it are not able to do so with consistent accuracy. Our corporate tax is one of the highest in the world at 35%, but is so riddled with loopholes that corporations like General Electric are able to use sophisticated tax strategy to reduce its liability to zero. Might I add that the nation has had no budget for four years, instead relying on one stopgap measure after another due to Congressional infighting, and that we are again running up against a debt limit that must be increased if the nation is to avoid defaulting on its obligations?
President Obama, for better or worse, holds all the cards, having won re-election, albeit without a large popular vote margin or mandate. As the Republicans say "no," he emphasizes his willingness to sign legislation to retain tax cuts for middle-income Americans. If he receives no bill, draconian measures will kick in on Jan. 1 and the Republicans will absorb most of the blame. Why on earth would they choose to do that?
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