Legal Commentary

How To Win The Tax Battle

By Big Tent Democrat

Politico:

With a first meeting called for Thursday, House and Senate Democrats are beginning active discussions on when — and for how long — to extend Bush-era middle-class tax cuts due to expire at the end of this year. [. . .] Senate Finance Committee Chairman Max Baucus (D-Mont.) is more bullish on a permanent extension after adjustments are made in the higher rates. “With today’s budget picture, it’s no longer clear that we can afford large tax cuts for the most well-to-do,” he said, opening a Finance Committee hearing on the subject Wednesday. But in wrap-up comments later, Baucus made clear that he will push for a permanent extension of those provisions that affect middle- and working-class families.

[. . .] The House-Senate differences among Democrats appear driven, too, by tactical considerations regarding a second revenue battle left over from the George W. Bush years: the estate tax. [. . .] Baucus would like to use the middle-class tax-cut extensions as a vehicle to resolve this fight, and by promising to make those individual tax cuts permanent, Baucus gains some potential leverage with moderates in his party.

It does not matter if Baucus is embarrassed or gains leverage over "moderates in his party." Progressive Dems have the upper hand here - the Bush tax cuts expire if nothing happens. This is huge leverage, I like the noises Bernie Sanders is making:

Sen. Bernie Sanders [. . .] wants an estate levy even stricter than that of the House, and it’s not certain that the House bill — passed last year — would get the same votes now.

Sanders and progressives can get an "even stricter" estate tax by blocking all legislation and simply letting the Bush tax cuts lapse. For once, doing nothing is a real option. Inside the Beltway, protecting their wealthy benefactors is imperative:

Senate Majority Leader Harry Reid (D-Nev.) conceded Wednesday that the estate-tax issue has become entangled with the small-business bill — making it harder to proceed. And this adds impetus to Baucus’s argument that the better route would be to have the showdown battle in the context of the middle-class tax-cuts extension when Congress returns after Labor Day.

But it is not for progressive Dems. In short, to hell with Baucus and Reid on this issue, Progressives can get what they want by simply making sure nothing happens. They have the bargaining power now. Time to use it.

Speaking for me only

Full post as published by TalkLeft on July 21, 2010 (boomark / email).