Senate GOP Fires the First Shot on Taxes

Obama may have thought he got a concession on taxes from John Boehner, but Mitch McConnell ratcheted things up a bit:

Republicans in the U.S.Senate poured cold water on Monday on hopes for a compromise with President Barack Obama that would have allowed Bush-era tax cuts for the wealthiest Americans to expire.

Taxes have become a flashpoint going into a Nov. 2 election in which Republicans are seeking to wrest control of Congress from the president's fellow Democrats. Obama says the cost of keeping the tax cuts for the rich is too high as the United States emerges from recession with a massive budget deficit.

The uncertainty over tax policy is hanging over the slow economic recovery and is keeping investors guessing about what will happen to taxes on capital gains and dividends.

Prospects faded for breaking the deadlock when Republicans gave a cool reception to a signal on Sunday by John Boehner, their party's leader in the House of Representatives, that he might be willing to bend.

In a political gambit, Senate Republican Leader Mitch McConnell proposed a freeze on all tax brackets, insisting that cuts for wealthier Americans, as well as for the middle class, must be kept in place.

"I'm introducing legislation today that ensures that no one in this country will pay higher income taxes next year than they are right now," McConnell said on the Senate floor.

It's going to be hard for Democrats to argue that certain Americans should pay more in taxes next year while others do not. People understand the concept of equality and class warfare rhetoric doesn't fit that concept.