Theres been a lot of chatter about Sen. Patty Murrays big speech in which she claimed that Democrats hold the leverage in the coming fiscal cliff talks over the Bush tax cuts and that they should be prepared to let all the tax cuts expire if necessary to force the GOPs hand.
The idea is that if all the cuts expire, Democrats can renew just the middle-class cuts, and dare Republicans to vote against it.
The Obama/Democratic proposal would cut taxes on all income up to $250,000, even that enjoyed by the job creators and small-businesspeople who make more than that. Republicans wont support this proposal because so doing would deprive them of leverage over tax rates only on income above that level.
Murray is chair of the Democratic Senatorial Campaign Committee – and shes signaling that she thinks this battle makes for good politics. The idea is to separate the debate over the middle-class tax cuts from the debate over the high-end ones; if the latter debate can be isolated, its a tougher position for Republicans.
The Senate is expected to vote later this month on this proposal. Right now, were talking only about a continuation of the low rates. If the Bush tax cuts expire and Murrays scenario comes to pass, Republicans would be forced into voting against an outright reduction of tax rates on all that income simply because they also want a reduction on income above that. If that doesnt clarify the debate, its unclear what will.