Earlier this month, Sen. Joe Manchin, D-W.Va., said the best solution to the fiscal crisis might involve restoring federal income tax rates as they were before the Bush-era tax cuts.
If those higher rates under Clinton were restored, Manchin added, the increases could be phased in over three years, between 2013 and 2015.
There is no single "fiscal cliff" issue that will determine what happens after Jan. 1.
Congress can re-enact, revise or eliminate a wide range of income and other tax provisions, as well as federal spending programs.
"A Fiscal Obstacle Course, Not a Cliff," a paper by Josh Bivens and Andrew Fieldhouse published by the Economic Policy Institute, a nonprofit Washington, D.C. think tank, argues economists and policymakers should stop talking about the upcoming "fiscal cliff."
Federal leaders, they argue, should come up with "a plan to ensure that the budget deficit is not reduced so quickly that it harms the economy and worsens unemployment."
Earlier this month, the National Economic Council said income taxes would increase for 600,000 middle-class West Virginia families if the tax cuts expire. Other tax cuts will also expire, including the expanded Child Tax Credit and the American Opportunity Tax Credit.
"If Congress fails to act, every American family's taxes will automatically increase, including the 99 percent of West Virginia families who make less than $250,000 a year," the National Economic Council's report states.
Some Republicans, including U.S. Rep. Shelley Moore Capito, have said letting the tax rates rise for those making above $250,000 would harm small business owners. But opponents of extending the tax cuts for the wealthiest Americans say that's a red herring.
"Nationwide, only 3 percent of small business owners make more than $250,000 a year. Allowing Bush tax cuts to expire for upper income taxpayers would not affect our nation's most important job creators -- small business owners," said Gary Zuckett, director of the West Virginia Citizen Action Group.
"Let tax rates go back to what they were during the Clinton era -- an era of robust jobs growth and balanced budgets. Going back to those tax rates will help the economy," Zuckett said.
In the latest annual edition of its "State of Working America," the Economic Policy Institute reports that the richest 1 percent of American households have accumulated 288 times more "household wealth" than the median American household in 2010.
The wealthiest 1 percent of all Americans own 35 percent of all wealth in the U.S., according to the Economic Policy Institute, which attributes the growing wealth gap to deregulation of financial institutions, lower tax rates and weaker protections for the rights of collective bargaining.
Reach Paul J. Nyden at pjny...@wvgazette.com or 304-348-5164.