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Was Biden Signaling a Shift on Taxes? Was Biden Signaling a Shift on Taxes?

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Leadership

Was Biden Signaling a Shift on Taxes?

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Vice President Joe Biden makes a point during the vice presidential debate with Republican vice presidential nominee Rep. Paul Ryan of Wisconsin at Centre College, Thursday, Oct. 11, 2012, in Danville, Ky.(AP Photo/Eric Gay)

All around town this week, bold-faced name decision makers laid down their markers on the fiscal cliff.

President Obama's former Director of the National Economic Council, Larry Summers, said the payroll tax holiday should be extended during a speech at the Center for American Progress. Top Democratic Sen. Charles Schumer, D-N.Y., urged lawmakers to tax the rich as a way of paying down the deficit in a speech on Tuesday at the National Press Club.

Vice President Joe Biden weighed in on the taxation issue, too, during Thursday night's vice presidential debate. Several times, he referred to the way the country needs to start taxing millionaires at a higher rate. "The middle class will pay less and people making $1 million or more will begin to contribute slightly more," Biden said.

The only problem with Biden's characterization is that it contradicts President Obama's campaign mantra of allowing the Bush-era tax cuts on the wealthy to expire for household income above $250,000. That's a point the president has held onto since 2008. There's a big difference between defining the wealthy as millionaires versus a quarter of a million dollars--both politically and in terms of raising enough money to pay down the deficit. This issue has been a contentious one for months for Democrats, who remain divided on the best way to define who is rich and who should, therefore, pay more on their tax bills.

The Obama campaign, following the debate, said that Vice President Biden was referring to the way high-income tax breaks overwhelmingly benefit millionaires; the White House was not shifting its position and remained committed to the $250,000 threshold.

But, the language Biden kept using Thursday night seemed to call this into question. And, he repeated it enough times to make it seem unlikely that it was just a Biden gaffe.

"Just let the taxes expire like they're supposed to on those millionaires," he said in the debate moderated by ABC News Correspondent Martha Raddatz. "We can't afford $800 billion going to people making a minimum of $1 million. They do not need it, Martha. Those 120,000 families make $8 million a year. Middle-class people need the help."

Biden's comments caught the attention of tax experts and lobbyists around town because the Democrats have had trouble, among themselves, defining the threshold of who is wealthy. Both Schumer and House Minority Leader Nancy Pelosi said last spring that they wanted to only raise taxes on people who earn more than $1 million a year. Later, they--and other Democrats--fell in line with the president in an effort to make the party appear united on its campaign messaging during a close presidential race.

But after November, when the negotiations over the fiscal cliff heat up and deals will need to be struck, it will be interesting to see if there is a reopening of the rift among Democrats on the definition of who is rich and who ends up with a bigger tax bill.

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