Calls to extend Bush tax cuts face difficult pay-as-you-go reality [View All]

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http://thehill.com/blogs/on-the-money/domestic-taxes/110793-calls-to-extend-bush-tax-cuts-face-difficult-fiscal-reality

Democrats who are seeking to extend tax cuts for the wealthy enacted by President George W. Bush might be creating a “Sophie’s Choice” scenario when it comes to paying for their cost.

Pay-as-you-go rules stipulate that extending tax breaks for individuals making more than $200,000 or couples earning more than $250,000 cannot add to the deficit.

But in the limited universe of politically palatable offsets, lawmakers will have to choose between paying to extend these tax breaks or using the revenue for another initiative that might be nearer and dearer to the hearts of their constituents.

“To extend the tax breaks above 200 and 250, it has to be paid for under statutory PAYGO, and that takes money from other purposes,” said House Ways and Means Chairman Sandy Levin (D-Mich.).

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Chuck Marr, director of Federal Tax Policy at the Center for Budget and Policy Priorities, told The Hill that allowing the upper brackets to reset at higher rates could provide revenue for programs to stimulate the economy.