Dems, GOP clash over taxes as 'fiscal cliff' warnings increase

Published: Wednesday, July 18 2012 12:00 a.m. MDT

The Business Roundtable said policymakers should make a deal to extend the Bush-era tax cuts while the Tax Relief Coalition encouraged Congress to extend the expiring tax provisions and make reforms to the U.S. tax and entitlement systems a priority, echoing a June 5 letter from the Chamber of Commerce.

"Mrs. Murray may think she's putting Republicans on the political spot, but her real hostage is the already weak economy," a Wall Street Journal editorial said. "Growth in the first quarter was a mere 1.9 percent, and economists have steadily downgraded their expectations for the second. As the tax cliff approaches, the policy uncertainty is already causing businesses to hold off on hiring and investment. Even the Keynesians at the Congressional Budget Office say that if all of the Bush tax rates expire, growth will fall close to recession territory."

An Investor's Business Daily editorial also slammed the rhetoric, saying Obama and his Democratic allies are pointing a gun at the economy and threatening to pull the trigger unless they get a tax hike that will hurt economic growth.

"If President Obama really wants the wealthy to pay more in taxes, he should champion the kind of tax reform that his long-discarded Simpson-Bowles Commission encouraged," Liz Peek wrote at The Fiscal Times. "With every sign that the economy is slowing, our Campaigner in Chief is creating even more anxiety by taking an unwavering stand — he will not, he affirms proudly, extend current tax rates on all Americans. Instead, he demands the wealthy pay more. That's it. That's his grand plan for getting the country moving again."

A Pew poll shows that 44 percent of the public believes that raising taxes on incomes above $250,000 would help rather than hurt the economy. A recent McClatchy-Marist poll shows that 52 percent of registered voters want all the tax cuts extended, including those for incomes above $250,000.

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