Democrats say they have reconsidered their opposition to the Bush tax cuts for several reasons. The cuts were written into law from 2001 to 2003 after a decade in which most Americans saw robust income growth. Over the past decade, by contrast, median wages have declined, after adjusting for inflation, amid a weak economy. Allowing tax cuts for the middle class to expire would further reduce take-home pay.
“We’ve had these tax cuts in place since 2001. The world changes, and the economy is where it is,” said Steven Elmendorf, who was chief of staff to former House minority leader Richard A. Gephardt (D-Mo.), a primary opponent of the Bush tax cuts. “With people’s economic status, we should not be raising taxes on people earning under $250,000.”
What’s more, income inequality has been growing. Sparing the middle class higher taxes while requiring the wealthy to pay more would tip the scales slightly in the other direction…
Even as they agree that taxes shouldn’t rise on the middle class when the economy is still weak, some liberals are worried by the prevailing Democratic view that the bulk of the Bush tax cuts should be made permanent. Liberals fear that lower revenue means less money for domestic programs, such as education, as well as for the social safety net.