Rep. James Clyburn of South Carolina, the new No. 3 leader of House Democrats in the 112th Congress, said it's not "essential" for Congress to extend the Bush tax cuts because if all income taxes go up as scheduled on January 1, "you've got a big deficit reduction taking place, which is also a good thing."
Clyburn is the first Democratic leader to suggest any benefit from a failure to extend the Bush-era tax cuts. The White House and every Democratic leader to date has described extension of the middle-class portion of the Bush tax cuts as a top economic and political priority.
He's missing the forest for the trees. If they fail to extend the tax cuts, there will be much uncertainty in the market because ALL Americans will be uncertain about what their budget will be and how much money they will have during this upcoming year. So, they will hold onto their money and not buy/invest until they are sure what their taxes will be. This won't be a small raise in our taxes. It'll be significant enough that people will have to make huge changes to their financial plans either way it goes. We need to get this over with, so they can go ahead and plan for next year.
Also, his assertion that the increased taxes will help with the deficit is untrue, if you consider what will likely happen at the beginning of the 112th Congress. As Paul Ryan stated last night, if the cuts are not passed during the lame duck, it will likely be passed at the beginning of next year, when the Republicans will get a huge majority in the House, and if it is passed, it will most likely be made retroactive to the beginning of 2011. So, there will be no benefit on that end at all. The Democrats would have put America through alot of anxiety and uncertainty for nothing.