Extending Bush tax cuts (or not) at year's end, puts U.S. between a rock and a hard place.

Despite all the pros and cons explained in this excellent McClatchy analysis, my own preference would be for the President to keep his campaign promise of not raising taxes on those who make less than $250,000. At the same time, tax rates on the wealthy should be allowed to return to previous levels, as a matter of principle, if nothing else. But it will be a real dilemma. Perhaps the economic situation, as it emerges through this year, will dictate the solution. In addition, it would help the "deciders" if the wishes of the people have been made clearly known by that time.

clipped from www.mcclatchydc.com WASHINGTON — With the clock ticking toward a massive, automatic tax increase at the end of this year, President Barack Obama on Monday will launch a political battle over who will pay higher taxes and who won't. Without action, all the Bush-era tax cuts that were enacted in 2001 and 2003 will expire on Dec. 31. With his budget proposal Monday, Obama will urge Congress to extend all of the Bush-era tax cuts for those who make less than $250,000 a year and to end those cuts for everyone who makes more than that, as he promised in his campaign. Thus, the results of the coming debate will determine not just how much people pay in taxes next year, but also could have outsized impact on the federal budget and the economy for years to come. Keeping all of the Bush tax cuts without offsetting spending cuts would add $4.5 trillion to the deficit over the next 10 years, said Congressional Budget Office Director Douglas Elmendorf.