David Cay Johnston on the Bush Tax Cuts

From Democracy Now ("Obama Fights to End Bush Tax Cuts for the Wealthy, GOP Pushes Back"):
When President Bush came into office, he had a tax cut proposal. It was the key thing in his campaign. He did not, however, pass it through normal legislative means. They did it through something called reconciliation. You’ll recall that’s how healthcare was passed earlier this year. And that meant there was a ten-year limit on these tax cuts.

The Republicans at one point during the last decade controlled the House, the Senate and the White House, but they did not make these tax cuts permanent. And the issue now is that the Republicans’ position, at least so far, has been that they will not support anything the President is proposing, which means everyone’s taxes would go back up January 1st. That is, the Republicans’ position, if it stands, is higher taxes for everyone. The President’s position is higher taxes only for only those people in the top two or three percent.

Not being discussed in all of this are two crucial issues. One of them is how much those tax cuts cost us. Basically, all the income taxes that everyone in America paid in January and February of this year only went to cover interest on the money borrowed for the Bush tax cuts over the last decade. Just interest on those tax cuts.

The second issue not being discussed is that this top tax rate, the two that President Obama wants to have go back to the Clinton-era level, they cut in at a quarter-million dollars and about $400,000 of taxable income. In fact, we have a large number of people in this country now who are making multimillion-dollar annual incomes, and we’re not talking about a higher tax rate on them. We’re starting actually at a very low level. And the very highest-paid workers in the history of the world, hedge fund managers, at least twenty-five of whom made a billion dollars last year, pay a current tax rate of zero. The news media keeps saying 15 percent. They pay the 15 percent, when they cash out, which could be decades from now. None of that is on the table.