GOP Congressmen May Give Up On Bush Tax Cuts For The Rich: Report

After years of relentless opposition, some Republican Congressmen may be willing to allow the high-income Bush tax cuts to finally expire, the Financial Times reports.

Yes, certain Republican Congressmen have begun privately arguing that it would be best for the party to succumb to Democratic demands and allow the Bush tax cuts to expire on income above $250,000 if President Barack Obama wins reelection, which the aide acknowledges would leave Republican Congressmen with not "much leverage," a senior Republican Congressional aide told the FT.

Democratic politicians have hammered Republicans over their refusal to budge on the issue. Obama, who has proposed a one-year extension of the Bush tax cuts for income up to $250,000, has made well known his willingness to raise taxes on the rich. Senator Charles Schumer (D-New York) agrees, saying on Tuesday that any tax compromise maintaining the Bush tax cuts for the rich upfront "is almost guaranteed to give middle-income earners the short end of the stick."

It would certainly make the budget gap more difficult to close. Extending the Bush tax cuts on income above $250,000, which are scheduled to expire along with the rest of the Bush tax cuts at the end of the year, would cost the government $1 trillion in tax revenue over the next 10 years, according to the Congressional Budget Office.

The GOP aide's admission comes amid a struggle in Washington to find a compromise that would avoid the "fiscal cliff," a combination of tax hikes and spending cuts scheduled to go into effect at the end of the year, and which, if unchanged, would likely cause a recession, according to economists.

There's one problem. Many Republicans are refusing to allow any tax hikes as part of the deal, and Democrats say they are only willing to consider some spending cuts if Republicans allow some of those tax hikes.

CORRECTION: An earlier version of this post stated that extending the Bush-era tax cuts would cost the government $1 trillion in tax revenue over the next ten years, according to the Congressional Budget Office. That statistic applies only to tax cuts on income above $250,000.