NOTE ON THE TAX CUTS (from forbes.com/2010/07/22/expiring-bush-cuts-affect-personal-finance-taxes.html):

• The tax cut in 2001 created six tax rate brackets--10%, 15%, 25%, 28%, 33% and 35%, based on income levels.
• If an extension is NOT passed and signed into law, then the pre-2001 tax rates will go back into effect starting in tax year 2011.
• The 10% bracket would disappear, and those taxpayers would move up to the 15% bracket, which would apply to all incomes below $34,550.
• The other tax rates would increase to 28%, 31%, 36% and 39.6%

2. Instead of working on the tax increase bill until it is settled, what bills would Democratic senators prefer to work on?

3. a) What has Senate Majority Leader Harry Reid said he will do? Why does he say he will take this action?
b) Ask a parent if he/she agrees with Senator Reid's decision, and to explain his/her answer.

4. How do Democrats and Republicans differ in their stance on extending the tax cuts?

5. The following is from a commentary on the tax cuts:

• In 2001 and 2003 (almost 10 years ago and 8 years ago) the Congress approved a reduction in tax rates to spur the economy.
• The deal was, the tax cuts would expire at the end of 2010 unless they were affirmatively extended.
• The tax rates which are currently in place are the ... tax rates which are currently in place.
• Republicans have allowed [Democrats] to categorize the argument as "extending the Bush Era Tax Cuts." That's flat wrong.
• What President Obama and most ... Democrats in Congress want to do is to RAISE TAXES.
• If all of the Bush Era Tax Cuts are extended, no one, not one single person of the more than 310 million in the United States will have their taxes cut. Their tax rates will remain the same.
• If, on the other hand, Nancy Pelosi and her Liberal colleagues in the House want to change [current] rates, they will not be reversing a tax cut, they will be RAISING TAXES.  (found at studentnewsdaily.com/commentary/it-is-NOT-a-tax-cut)

a) What do you think of this explanation?
b) Do you think tax rates for any Americans should be raised? Explain your answer.
c) Do you think an increase in tax rates for "the rich" will negatively affect the middle and lower classes (jobs, etc.)?