Posted Wednesday, July 25, 2012, at 5:19 PM
Today the US Senate did something a little crazy and held two votes on tax policy operating under the rule that the side with the most votes would win. So first they voted on a one-year extension of all the Bush tax cuts, and since less than half of the Senate favored that bill it didn't pass. Then they voted on the Democrats' proposal—an extension of the "middle class" tax cuts, with non-extension of tax cuts that only the top two percent or so of taxpayers benefit from. And despite aisle crossing from Jim Webb and Joe Lieberman it passed.
So the action's now on to the House of Representatives. The GOP position has been that middle class families can only avoid their automatically scheduled tax increase if the tax cuts for the rich are looped in. But is that really tenable? It's worth noting that high income individuals benefit pretty handsomely from the "middle class" tax cuts too, so if you're a rich guy you appreciate the GOP holding the line but only if it actually works. The Democratic plan is much friendlier to rich and middle class taxpayers alike than is the possibility of deadlock and full expiration.