Ben Franklin got it right when he wrote, 'nothing can be said to be certain, except death and taxes.' This campaign season, though, we can bank on another certainty, the candidates battling to the death over taxes.
You're probably hearing a lot about the Bush-era tax cuts in the news. Republicans and Democrats disagree over what to do about them, but what are they exactly?
The Bush-era tax cuts are changes in the tax code that were made during George W. Bush's administration, passed in 2001 and 2003. They lowered the tax rate paid by Americans at all income levels
These changes were set to expire at the end of 2010, but President Obama reversed his 2008 campaign position and renewed the tax cuts for two years after reaching a larger tax agreement with Republicans. Now, those extensions are scheduled to end December 31, reigniting a hot-button debate right in the middle of a presidential campaign.
Republicans want to extend all Bush-era tax cuts through at least 2013. Governor Mitt Romney wants to extend them permanently. He believes low tax rates will jump-start the economy and create jobs. Romney's plan includes an additional permanent 20 percent reduction to income tax rates across the board. He believes in maintaining current tax rates on interest, dividends and capital gains and advocates eliminating the estate tax.
President Obama supports extending the Bush tax cuts for households making no more than $250,000 and individuals making no more than $200,000 a year. Obama's campaign estimates these extensions could prevent many middle class families from being hit with a $2,200 average tax hike. The president contends that large budget deficits require those who can afford it to pay higher taxes. Rates for the top income brackets would jump from 33 and 35 percent to 36 and 39.6 percent -- back to the levels under President Clinton.
Should the Bush-era tax cuts be made permanent, or should the tax breaks for the wealthy expire?