Senator Warner proposes a compromise on tax cuts
U.S. President George W. Bush addresses a rally at Lafayette Regional Airport in an effort to sell his tax cut plan to the American people 09 March 2001 in Lafayette, Louisiana.
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STEVE CHIOTAKIS: Congress will have other tax matters to look at when members reconvene Monday. Specifically, what to do about the Bush-era tax cuts that are set to expire in December. President Obama said this today, the nation cannot afford to extend cuts that affect the nation's wealthiest but is open to compromise.
There is already a proposal from Democratic Senator Mark Warner of Virginia. Marketplace's Alisa Roth reports.
ALISA ROTH: The Senator's idea looks something like this. He laid it out in an op-ed in the Financial Times. Go ahead and let the tax cuts for the wealthiest taxpayers expire. That's something the Republicans oppose.
But extend the tax cut for everybody else. And make up the $65 billion in revenue that would be lost. By pushing corporations to spend. By offering them special tax cuts and incentives to spur the economy.
Warner's argument is that corporate America has been raking in the money. But it's been reluctant to make big investments or create new jobs.
Len Burman is a public affairs professor at Syracuse University. He says it makes more sense to tax rich executives because taxing corporations more discourages them from doing business here.
LEN BURMAN: The main point is corporations don't really pay taxes, people pay taxes. And the ideal thing would be a tax system where you, the people who are reaping the big rewards from corporations pay more individual income taxes.
Warner's proposal might offer the Obama administration a way to reassure Democrats who want to re-institute higher tax rates for wealthy Americans. And to reassure Republicans who want to help businesses.
I'm Alisa Roth for Marketplace.