As the New York Times led in Sunday's paper, the battle over maintaining or eliminating the tax cuts passed in the last decade by the Congress that are due to expire on January of 2011 will be one of the biggest of the fall, leading right into the Congressional elections.
Known as "The Bush tax cuts", the marginal tax rates for nearly every income range is expected to rise next year, and Democrats, the controlling party that owns the White House and Congress, has said that they intend to pass legislation to preserve those tax cuts for individuals making less than $200,000, and for couples making less than $250,000, keeping in line with President Obama's campaign promise not to raise taxes on middle-class Americans.
But the fight has already begun on those making more than $200,000 individually. If nothing is done legislatively, those making between $209,251-$373,650 would see their margin tax rate rise from 33% to 36%, while those making more than $373,650 would rise from 35% to 39.6%, the rates it should be noted, that were in effect during the Clinton administration, where most fair minded people would acknowledge the economy did pretty darn well (and would affect only 2% of the entire country).
On ABC's This Week, Treasury Secretary Tim Geithner told host Jake Tapper that it wouldn't be that big of a deal. And he said that the administration wants to provide a tax cut for small businesses.
GEITHNER: And in fact, we go beyond that. Because you know, we're proposing to extend the make or pay tax cut which also goes to 95 percent of working Americans. And a set of very important business tax cuts targeted for small businesses themselves, expensing, zero capital gains rate for investment in small businesses. These things, we think, are very helpful, very powerful.
TAPPER: And when are you talking about pushing that into Congress?
GEITHNER: Congress is on the verge of what we hope will be enactment of a very strong package of tax measures for small businesses and ways to help them get credit so they can expand.
TAPPER: So, before the election?
GEITHNER: Oh, absolutely
TAPPER: A number of Senate democrats, moderate Senate democrats have said that they oppose repealing or allowing to expire the Bush tax cuts on the wealthiest Americans that they think that would be harmful to growth. Are you guys going to have the votes to get through the package you want which is focused more on middle and lower income America? GEITHNER: Oh absolutely. I believe we will.