In what could be good news for the middle class (if President Barack Obama is re-elected), Vice President Joe Biden during a debate on Thursday with GOP vice-presidential candidate Paul Ryan signaled a possible change in the Democrats' longstanding position on tax rate increases, raising the threshold for increases from families with annual incomes of more than $250,000, to those making one million or more.
"The middle class will pay less and people making a million dollars or more will begin to contribute slightly more," Biden said, describing Obama's tax proposal. "Just let taxes expire like they are supposed to on those millionaires. We can't afford $800 billion going to people who (are) making a minimum of $1 million."
The comments have led the media to speculate that the Democrats may be hoping promote a plan that is more amenable to Republicans. as noted by Reuters in an article today.
Tax rates for families making more than $250,000 will automatically increase at the start of the year if Congress allows President George W. Bush's tax cuts to expire in December, as scheduled.
The tax increases, along with deep spending cuts could lead the U.S. economy over a "Fiscal Cliff," a term coined by U.S. Federal Reserve Chair Ben Bernanke earlier in the year, sending it back into a recession.
Each side took some shots for comments made during the debate.
Dean Baker, the co-founder of the Center for Economic Policy and Research, criticized Biden for not stating explicitly that the Obama administration wouldn't cut Medicare and Social Security, The Huffington Post reported. Ryan was criticized for insisting that the Republican tax plan wouldn't result in increases in the deficit or hurt the middle class.
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