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When it came to government spending, the Democrats said we needed more to head off an economic collapse. The Republicans said, No way, we need to show the world that we can be responsible about our deficit.

Now we're talking taxes. The Democrats say we need to raise taxes on high-income households to be fiscally responsible. The Republicans say we need tax cuts to, well, head off an economic collapse.
 
Still, the White House seems to be staking out a reasonable middle ground. Keeping today's low tax rates comes with a cost in badly needed tax revenue. Keep them low for all taxpayers, and the cost is some $3.7 trillion over 10 years. But keep them low for all but the wealthy, and the cost is just under $3 trillion, or nearly $700 billion less.

In other words, the White House is proposing tax-cut stimulus (keeping low rates for most of the country) and some, albeit small, deficit reduction (by letting rates go up for the wealthy.)

Democrats also note that lowering  taxes on the wealthy is ineffective stimulus and a few extra percentage points of tax on the wealthy is hardly a recovery killer -- the income tax rates would be the same as during the booming 1990s, they note. Republicans differ on both counts.

Here's a guide to who has said what so far:
 
Treasury Secretary Tim Geithner, Aug. 4, 2010
Position: Extend the tax cuts for all but families making more than $250,000. The country gets stimulus and sends a message on deficits.

"Borrowing to finance tax cuts for the top 2% would be a $700 billion fiscal mistake," Treasury Secretary Tim Geithner said Wednesday in prepared remarks for a speech he was going to give. "It's not the prescription the economy needs right now, and the country can't afford it."  (story)

Senate Minority Leader Mitch McConnell, R-Ky. Aug. 4, 2010
Position: Extend the tax cuts for all households. Raising taxes would kill the recovery, he and other Republicans say. 

 "It'll have the devastating impact of raising taxes in the middle of a recession," said Senate Minority Leader Mitch McConnell, R-Ky., at a news conference of GOP senators. (story)

Senate Budget Chairman Kent Conrad, D-N.D.

Position: Conrad is a Democrat and high credibility as a deficit hawk. Nevertheless he said recently that he is reluctant to let anyone's tax cuts expire just yet.

"In a perfect world, I would not be cutting spending or raising taxes for the next 18 months to two years. This downturn is still very much with us unfortunately." (story)

Former Federal Reserve chairman Alan Greenspan on Meet The Press, Aug. 1, 2010
Position: Let taxes go up for everyone. It will slow growth, but cutting the deficit is more important right now.

"Look, I'm very much in favor of tax cuts, but not with borrowed money.  And the problem that we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money.  And at the end of the day, that proves disastrous.  And my view is I don't think we can play subtle policy here.

Meet the Press:  You don't agree with Republican leaders who say tax cuts pay for themselves?

Greenspan:  They do not. (story)

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