This doesn’t sound very encouraging. Krugman believes the Democrats will give in and extend the Bush tax cut plan for everyone, including the top 2%. If that happens, expect even less enthusiasm from the left, not that that matters to the White House. The Democrats certainly have a way of caving to their foes and ignoring their supporters. As John often says, “because the Republicans are worse” is hardly a strategy for success. It definitely doesn’t inspire me.
Democrats abandoned plans to vote before Election Day on extending Bush-era tax cuts for the middle class while eliminating them for better-off Americans, spooked by protests from vulnerable incumbents and bleak prospects for passage.
With time running out to plan for 2011, the delay raises uncertainty for small businesses and individual taxpayers over their future liabilities. It also sets up a titanic battle over taxes after the election.
If returning lawmakers don’t pass legislation by Dec. 31, the expiration date of the cuts, tax rates would rise not only on income, but also on estates, capital gains and dividends. Important corporate tax credits and relief from the Alternative Minimum Tax also are up for renewal.