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More Democrats Join Growing Chorus Saying Don’t Raise Taxes

September 29th, 2010 by mopns_admin · No Comments

The AP reports today, “Forty-seven House Democrats – enough to give Republicans a victory on taxes if the issue came to a vote – are breaking ranks with President Barack Obama by calling on party leaders to continue Bush-era tax cuts on investment income. The lawmakers, led by Rep. John Adler, D-N.J., have sent a letter to House Speaker Nancy Pelosi saying they strongly support extending the current tax rates on capital gains and dividends.”

And The Wall Street Journal notes, “It’s the latest sign of widening divisions among Democrats over plans by the party leadership and President Barack Obama to allow Bush-era tax breaks to expire for higher earners, defined as families making more than $250,000, while extending them for middle-income earners. Many centrist Democrats in the House and Senate have objected, saying raising any taxes could harm job creation and slow economic recovery.”

This new letter joins a growing chorus of Democrats urging the Obama administration and their leadership in Congress not to raise taxes in the middle of a recession. Previously, at least 5 Democrat senators and 31 Democrat House members all agreed that now was not the time to raise taxes.

According to the WSJ, “The letter from House Democrats argues that raising taxes on dividends and capital gains would be harmful to companies’ ability to grow and add jobs. It also makes the case that older Americans, who often depend on dividends for income, could be hurt by a change that encourages companies to reduce their dividends.” This is at odds with President Obama, though. As the AP notes, “Tax cuts enacted in 2003 set the top tax rate on capital gains and dividends at 15 percent. Those tax cuts expire at the end of the year, and Obama wants to let the top tax rate on capital gains and dividends increase to 20 percent for individuals making more than $200,000 and married couples making more than $250,000.”

But job creators are already troubled by the Obama administration’s plans to let taxes increase next year. Politico reports, “A wide swath of U.S. businesses Tuesday reported that the economy has slowed significantly in the last few months, and they said that the tax stalemate in Washington was a major reason that flagging consumer sentiment is now endangering the recovery. In separate reports, big business members of the Business Roundtable, along with manufacturers, home builders and the oil industry gave gloomy assessments of the recovery and said Congress’ decision to postpone action on tax cuts until after the election was weighing heavily on consumer sentiment.” Verizon CEO Ivan Seidenberg, the chairman of the Business Roundtable, which sided with the White House on health care, said, “It would be good for Congress to clarify its position on taxes . . . . In a sluggish economy, there are signs that a tax increase would have a [bad] effect.”

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