Rax the Tich

The White House wants to raise income taxes on Americans earning $250,000 per year. His former budget director, Peter Orszag, disagrees - sort of.

Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.

What is Orszag's reasoning?

Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt. And since financial markets don’t seem at the moment to view the budget deficit as a problem — take a look at the remarkably low 10-year Treasury bond yield — there is little reason not to extend the tax cuts temporarily.

The issue came up at the White House press "gaggle" yesterday.

"Our viewpoint on this is that we should and must pass legislation that extends the tax cuts for middle-class families," he said. "But we cannot afford, in this environment to -- in our budgetary and fiscal environment to extend the tax cuts for those that make more than $250,000 a year."

The president takes another position that will cause voters to think he wants to lose congress.