Yesterday, Obama stood his ground on letting upper-income tax breaks expire:
Dan Amira thinks the proposal is being reported incorrectly:
Obama is not proposing that families making up to $250,000 a year keep their tax cuts while families making more than that don't. He's proposing that every family keep its tax cuts on their first $250,000 of taxable income (which is not the same as "income" or "earnings," by the way). That includes families with taxable income of $260,000, $1 million, $5 billion, $3 trillion, or whatever Jay-Z and Beyonce make in a year.
Howard Gleckman is unimpressed:
President Obama … urged Congress to extend the 2001/2003 tax cuts for households making $250,000 or less and insisted lawmakers let those provisions expire for those making more. As the president himself said, “I’m not proposing anything radical here.” He’s right. And that’s too bad. This was an opportunity for Obama to at least tie an extension of the Bush-era tax cuts to tax reform and deficit reduction next year.
Nate Cohn emphasizes the political implications:
The tax issue strikes at the heart of Romney’s path to victory and illustrates the challenge facing his campaign. To win the Presidency, Romney needs a historic showing among white working class voters. While a sufficient number of white working class voters harbor deep reservations about the President’s performance, Romney has not yet consolidated their support and there are more undecided white working class voters than any other demographic group. Undoubtedly, attacks on Romney’s time at Bain Capital, tax evasion, and tax policies will help Obama among these critical voters.
Douglas Holtz-Eakin claims that Obama wants to raise taxes on small business owners:
[I]t could be that [Obama] is unaware that he is calling for heavier taxes on small businesses across the economy. His own Treasury has the information showing that 53 percent of small-business income reported by sole-proprietorships, partnerships, and other “pass-through” businesses is taxed in the top two brackets. If he knew, surely he would not want to attack this engine of economic prosperity.
Suzy Khimm looks at the cost:
If all the tax breaks are extended beyond 2013, the lost revenue quick ramps up over the next decade: extending them for 10 years would cost $4.4 trillion. If they’re extended to everyone earning $250,000 and less, it would cost the government $3.6 trillion.
Derek Thompson points out that more tax hikes will be necessary:
In the long run, historically low tax rates for the "bottom" 98 percent aren't sustainable. For President Obama, demanding higher taxes on rich people is the easy part. Three in five people told Gallup that "upper-income people" were paying too little in federal taxes, Molly Ball reported. The hard part is facing up to the long-term reality that historically low tax rates on 98 percent of Americans is no way to pay for historically high entitlements for 100 percent of Americans. Taxes should go up, and they should up first on the richest Americans who are least likely to feel the pinch from paying a couple hundreds to a couple thousand dollars more to Washington. This is a fine first step. It's not an end solution.
Jonathan Cohn endorses a novel way to phase out the middle-class tax cuts without threatening the recovery:
[I]f the middle class tax cuts stay on the books indefinitely, preserving key government programs and stabilizing federal finances over the long run will become more difficult. What to do about that? … Congress could set the middle class tax cuts to expire whenever the economy hit a certain threshold of strength—unemployment below 7 percent or something like that—rather than by a certain date. Such an approach would turn the Bush tax cuts for the middle class into an “automatic stabilizer”: It would provide a boost for the economy only for as long as the boost was necessary.
And Ezra Klein keeps an eye on the markets:
If Obama signed his name onto the upper-income tax cuts in the months before the election, it would effectively take tax rates on the rich off the table in the election, as both parties will agree on the issue, at least through 2013. But with its announcement today, the Obama campaign signaled that that’s not going to happen. And that means no clarity for the market on how — or whether — the fiscal cliff will be resolved until after November.
The Dish 