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Tennessee lawmakers from both sides of the aisle are divided over whether to extend the so-called “Bush tax cuts.” The debate is one of the biggest remaining issues in Congress this year.

Without Congressional action before the end of this year, a Washington think called the Tax Foundation says middle income Tennessee families would pay about $1400 extra a year in taxes.

Democrat Jim Cooper says lawmakers are poised to act. He says, “Virtually everyone agrees that we should extend the Bush tax cuts for at least 98 percent of the American people.”

Divide over cuts for top tax brackets

The real debate is over extending the tax cuts for the richest Americans and, if so, for how long. Figures from 2007 show more than 65,000 Tennessee tax returns with incomes above $200,000.

Republicans agree with an across the board extension.

“The middle of a recession is exactly the wrong time to raise taxes on anybody,” says Senator Lamar Alexander. “It makes it harder to create jobs.” Alexander
wouldn’t say whether he wants a permanent extension of all the tax cuts pushed by President George W. Bush. “Right now we are focused on creating jobs in the recession.”

Representative Marsha Blackburn is more direct. “I would love to see permanent,” says Blackburn. “We need to make certain Congress does not leave DC until we guarantee the American people those tax reductions are extended.”

The issue is tougher for Democrats, especially those in tight re-election races.

Raising taxes on the richest Americans would save the government $700 billion over the next decade. At the same time, lawmakers don’t want to associate themselves with a tax increase. Many are waiting to see what concrete proposals actually make it to the House and Senate floor.

“I don’t get to vote on ideas. I get to vote on specific pieces of paper,” says Cooper.

Democrat Bart Gordon echoes that sentiment. “Well, I am still seeing,” Gordon says, “waiting to see what’s going to come before us.”

Democrat Lincoln Davis revealed his preference after some prodding. “I think we have to extend the tax cuts of 2001 and 2003,” says Davis. “As far as I am concerned, all of them or whatever we can get.” When asked how long of an extension he’d like to see, the Congressman answered “two years.”

That would be fine with Senator Alexander. He says, “Senator McConnell and Representative Baynor have said if President Obama would like to extend the present tax levels for another two years that they would consider that. That seemed to me a reasonable approach.”

Reasoning behind extension questioned

Despite numerous defections from his own party, President Obama insists on raising taxes for the wealthiest two percent of taxpayers. He says it wouldn’t affect economic recovery.

Davis shares that skepticism of GOP claims. “If in fact those tax cuts stimulate the economy, why did we only grow by 8 million jobs in that decade?” Davis asks. “The decade before there were actually tax increases and we grew by 22 million jobs. I think there is a lot of spin today on a lot of things.”

Sitting on the front steps of the House of Representatives, Davis talks about lawmakers needing to move beyond whether to extend the tax cuts. He says certain actions can truly spur job growth.

“We want to accelerate depreciation schedules for small business people. We want additional deductions that are made for small business folks [that] will encourage jobs.”

For now the focus is on whether to reduce the deficit by raising taxes for wealthier more affluent Americans or reducing spending. Whatever lawmakers do, their votes will likely be colored by the drive for victory in November.

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