THE BLOG
09/08/2010 11:09 am ET Updated May 25, 2011

Grassley And Conlin Fight Over Fate Of The Bush Tax Cuts

As the US Senate returns from recess this week, Iowa Senate candidate Roxanne Conlin, a Democrat, stands firm with the position the Bush income tax cuts for the top three percent of Americans should expire.

"Frankly, we need the money," Conlin told the Huffington Post after a press conference on Thursday. "I believe it is a perfectly sound financial policy and necessary to begin to get the deficit under control to let those tax cuts expire [for families making more than $250,000 annually]."

The man she hopes to unseat, Sen. Charles Grassley (R-Iowa), was head of the Senate Finance Committee for several years during the Bush administration. Grassley's campaign charges Conlin wants to raise taxes on families and small businesses which would stall the recovery and labels it the "largest tax hike in history."

"The problem with her vocal support for allowing the 2001 tax provisions expire is that everyday Iowans will feel the impact," said Eric Woolson, spokesman for Grassley's re-election campaign, in a press release Friday. "She is on the wrong side and she cannot deny it."

While Conlin holds changes to Social Security should wait until the economy recovers, holding off on tax cuts for the richest Americans cannot.

"Jump start the economy with tax cuts for the wealthy--we've tried that," said Conlin. "That has failed miserably except in terms of increasingly the wealth for those at the top and those at the bottom... it has devastated the middle class."

President Barack Obama favors making the cuts permanent for middle class families, those individuals making more than $200,000 and couples making more than $250,000.

The Tax Policy Center, a Washington think tank, estimates it would cost $2.9 trillion over the next decade to extend all the tax cuts, while Obama's plan is estimated at $2.5 trillion over 10 years.

Under the Conlin and Obama plans, three percent of taxpayers who report business income on their individual tax returns would face a tax increase, according to the nonpartisan Joint Committee on Taxation.

The Conlin campaign contends only 18,662 Iowans, or 1.3 percent, would have their taxes raised under Conlin's proposal to allow the expiration on the top tier of tax filers.

According to the Center for Budget and Policy Priorities, the Bush-era tax cuts will account for a larger portion of the overall deficit than stimulus spending, the Wall Street bailout and the economic downturn combined by 2019, based on Congressional Budget Office estimates.

Multiple Bush administration officials, including former Treasury Secretary Henry Paulson, admitted tax cuts do not pay for themselves.

Grassley admitted earlier this summer it would be "a conundrum" if Republicans were forced to vote on a bill that kept the cuts for lower and middle class families, but raising taxes on the wealthy.

However, Grassley is also worried the estate tax will soar from zero to 55 percent on estates over $1 million, unless Congress acts. His campaign contends this would hurt farmers because $1 million "is far less than the value of an average Iowa farm."

"Roxanne Conlin is proposing to heavily tax Iowans who want to pass on the family farm or business," Woolson said. "She's not fighting for working Iowans; she's fighting to take as much of our money as she possibly can."