Albany Herald: Clock Ticking on ’11 Tax Hike

By The Editorial Board
Friday, December 10, 2010

When Baby New Year arrives in three weeks, he’ll be bringing a much bigger tax bill for Americans across the board unless Congress gets its act together.

On Thursday, House Democrats nixed President Obama’s tax compromise with Republicans, apparently frustrated that the president wasn’t tough enough at dickering over the numbers.

Not surprisingly, that vote to prevent the tax package from being considered on the House floor came hidden from public view so that Democrats who are still smarting over the beating their party took at the polls Nov. 2 can hide their sentiments from their constituents.

Plausible deniability is an age-old political tactic, especially when your constituents would blame you for being instrumental in costing them more money through higher taxes.

House Speaker Nancy Pelosi, every bit as much a lightning rod for criticism of the Left as former Speaker Newt Gingrich was for the Right years ago, said discussions would continue with Obama and Republicans to “improve the proposal” to the point where a vote can be taken.

Before the fall elections, there was a lot of finger pointing as to who was driving a partisan wedge in Washington. Democrats assailed Republicans as the “party of no,” and Republicans charged that Democrats had summarily dismissed them from any meaningful participation.

In any event, voters spoke loudly this year that they may not have a lot of faith in the way the GOP runs things, but they have less faith in the direction Democratic leadership was taking the country.

To Obama’s credit, he worked out what he felt was the best deal he could on avoiding a tax hike on Americans, especially when the U.S. economy is still fragile. While there are signs the economy is rebounding, there’s not a lot of confidence that the rebound will stick. A national unemployment rate of nearly 10 percent will do that to you.

Obama originally wanted to extend the lower federal income tax set by the Bush administration to only those Americans who make less than $200,000 individually and less than $250,000 as married couples. Democrats also expected the president to tax estates of deceased Americans — the death tax — at 45 percent for any amount over $3.5 million.

Republicans wanted the Bush tax rate to remain in place for everybody and for the estate tax to go away altogether.

From there, the president and GOP compromised — extend the lower tax rate to everyone for two years and set the estate tax at 35 percent for anything over $5 million.

In our district, U.S. Rep. Sanford Bishop, D-Albany, has gone on record stating that, given the economic situation, he thinks the lower tax rate should be extended to everyone. He also says he wants to see the estate tax ended.

Other House Democrats should do the same. This is no time to be hiking taxes.

The Obama administration has even gone so far as to warn his party’s lawmakers that failing to pass this compromise plan would have serious repercussions, including the possibility of tossing the nation into another recession.

The clock is ticking. And if action isn’t taken before the ball drops in New York at midnight New Year’s Eve, those who dropped the ball in Congress may well find themselves victims of a new recession by joining the unemployment line in November 2012.

Tick-tock.