Democratic leaders met this week to talk turkey and decided on two things:
- A vote on the Bush tax cuts won’t happen until after Thanksgiving; and
- The Bush tax cuts will be extended for those making $250,000 or less.
And that’s all we have. That means there’s a lot, obviously, that we don’t know. Here are some of the questions folks are asking this morning and my best guesses as to the answers:
- Exactly when is “after Thanksgiving” for purposes of the vote? According to CNN, the current number two Democrat in the House, Steny Hoyer (D-MD) has confirmed that the vote will “definitely” be after Thanksgiving. Subsequent reports have quoted House Speaker Nancy Pelosi (D-CA) as saying the vote will come in mid-December. I think the latter is probably right since I expect the cuts will be pushed as close to the year-end recess as possible.
- Will the middle cuts be made permanent? I don’t think they’ll be made permanent. Congress has shown a definite reservation towards making anything permanent over the last couple of decades – that’s kind of what got us into this pickle in the first place. The budget is a big worry right now for a lot of folks. I would not be surprised to see cuts that last somewhere around three years, long enough to be a factor in the 2012 elections.
- Will the GOP let the cuts at the top end go quietly? Are you kidding me? This is going to be a huge point of contention and it is, quite frankly, the GOP’s biggest compromise piece. I don’t know that the Democrats have the votes to get legislation pushed through that would extend the cuts at the bottom but not at the top, a factor which is also obvious to Republicans in the House. Cuts at the top may still happen, though I think those would definitely be on a temporary basis.
Expect the discussions around the tax cuts to heat up even more (as if that’s possible) over the next few days. The Democrats desperately need a win following losses earlier this month at the polls and their recent inability to push unemployment extensions through in the House. The Republicans, on the other hand, are struggling with their label as the “party of no” and realize that they must work to push something through; simply blocking the Democratic vote would allow all of the cuts to expire, a result that would not be overlooked by taxpayers. So, make yourself some popcorn and pull up a chair. The show over the next couple of weeks should be worth watching.Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel.