House Dems signal support for smart tax policy

HOUSE DEMS SIGNAL SUPPORT FOR SMART TAX POLICY…. I’m reluctant to get my hopes up, because something will almost certainly come along to screw this up, but Greg Sargent reports that House Democrats will hold a vote on the middle-class-first tax breaks many of us have recommended.

Steny Hoyer, the number two in the House Dem leadership, told Democrats at a caucus meeting this morning that they would get to vote this year on just extending the Bush tax cuts for the middle class, a senior Dem aide tells me, signaling support for a confrontational move towards the GOP that liberals have been pushing.

Asked if Democrats would definitely get a chance to hold this vote, the senior aide responded: “Definitely.”

Hoyer’s declaration comes as Democrats have been debating the way forward on the Bush tax cuts, and another aide tells me that “more than half” of the Dem caucus supports this course of action.

Assuming the aide is right, and this smart approach is garnering caucus support, there are any number of things that can still go wrong. First, there’s the question whether House Dems will really stick to their guns, even after Republicans push an awkward “motion to recommit.” We haven’t even heard an endorsement of this approach from anyone in the leadership.

Second, there’s the Senate, where a grand total of two members (Wyden and Feinstein) have expressed public support for the middle-class-first approach. Third, there’s the White House, which hasn’t necessarily signaled its support for any one alternative, waiting to see how this shakes out.

Having said all that, Greg’s report suggests Dems are at least moving in a smart direction.

To briefly recap for those just joining us, Democrats are committed to a permanent tax break for the middle class. Republicans have said this is simply out of the question unless Dems agree to help millionaires and billionaires at the same time.

The resulting strategy should be pretty easy. The approach originally backed by President Obama remains the best one: permanent breaks for those making under $250,000, Clinton-era rates for the wealthy. Dems can and should bring this package of middle-class tax cuts to the floor and dare Republicans to kill them. If the GOP caves, Dems get the policy they want. If the GOP kills the whole thing, Clinton-era rates return for everyone, which is probably the policy Dems should want anyway, and the headlines read, “Republicans kill tax cut compromise; higher rates kick in Jan. 1.”

Democrats have been on the defensive for no apparent reason. The middle-class-first option gives them a chance to get off the ropes and put the GOP on the defensive.