The Bush Tax cuts are scheduled to expire as of January 1st, 2014. If nothing is done, that means taxes go up on everyone who pays income tax.
President Obama is on the record supporting extending the Bush cuts for all earners below $250,000 per year and most small businesses. Obama does want to raise taxes on those earners above $250K, back to approximately the Clinton era levels, but with a maximum level of about 38%.
Republican leaders are holding fast to their position of new tax increases for anyone, period.
President Obama holds most of the cards in this game of poker.
He could try and negotiate a deal with the Republicans, but that seems unlikely given the rigidness of the GOP over time on the issue of raising taxes. Even a little. Republicans say they're willing to consider new revenue, but they mean more in the ways of closing tax loopholes, although they're not being at all specific, at least not yet.
Mr. Obama has almost begged for an agreement on the 98% of the issue both parties agree about. That taxes should not be raised on the lower and middle class. So far, he's been told no.
The good news for the President is that he needs to do nothing. If he waits for the Bush tax cuts to expire, then with everyone getting a tax increase, we can trust that in no time at all there will be a democratic Bill submitted for a tax cut for the lower and middle class. The GOP can agree to it or not.
If they agree to it, Obama and the Dems get what they've wanted all along.
If they refuse to cooperate, they get to explain to the most of the American people why they are voting against a tax break for them.
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