It will likely be one of the first orders of business for Maine’s next U.S. senator: extend the Bush tax cuts or let them expire?

With Congress deadlocked so far on which cuts to keep, the winner of the election Nov. 6 could cast a key vote.

The two major-party candidates are sticking to the party lines drawn in Washington.

Republican Charlie Summers said he wants all of the tax cuts extended. Democrat Cynthia Dill said she wants to extend tax cuts on household earnings of less than $250,000, while letting taxes rise for higher earners.

Independent Angus King, meanwhile, said he would vote to extend all of the tax cuts for now. He said he supports setting a trigger to rescind the tax cut on income over $250,000 as the economy improves.

The fate of the cuts is one of the major issues dividing Congress as November’s elections approach.

Allowing the cuts to expire would raise taxes on middle-class and high-income Americans, while extending them would add to the federal budget deficit.

President George W. Bush proposed the reduction in income tax rates and other taxes in 2001 and 2003 to stimulate the economy. The cuts were set to expire in 2010 until President Obama and Congress agreed to extend them two years. Unless Congress extends them again, they will expire Jan. 1.

It’s almost certain that there won’t be any resolution until after the elections.

Last week, the Democratic-controlled Senate voted 51-48 to extend the cuts for the first $250,000 of household income but allow the rates to rise for earnings above that amount. Maine’s two senators, Republicans Olympia Snowe and Susan Collins, voted with their party against the proposal.

On Wednesday, the Republican-controlled House voted 256-171 in favor of a proposal that would extend the Bush tax cuts for all income levels. Maine’s two representatives, Democrats Chellie Pingree and Mike Michaud, voted with their party against the proposal.

About 98 percent of Maine households earn less than $250,000 a year, according to the Institute on Taxation and Economic Policy.

Democrats argue that people who earn more can afford to pay the increase without any harm to the economy.

“The money that we spent on these tax cuts for the super wealthy are the major drivers of deficit (and) it’s obvious these tax cuts for the super wealthy have not created the jobs or the economic growth,” said Dill, a Democratic state senator from Cape Elizabeth.

Middle-class families are more likely to use the tax savings in their local economy, she said, while “the super rich will just invest more of their money and continue to make more money. It doesn’t circulate though the economy.”

Republicans say that a tax increase on anyone is a bad idea in a slow economy, and that targeting high earners would leave them less money to expand small businesses and hire workers.

“In this economy, I don’t think we should be raising taxes,” said Summers, who is Maine’s secretary of state.

Summers, who has signed a pledge to oppose any tax increases if elected, said some of the Mainers who earn more than $250,000 are small business owners and employers.

“Why do you want to take money out of the economy? They spend that money. Wouldn’t you want that working in the economy?” he said.

Summers said reducing the federal deficit is important, but letting tax cuts expire “is not going to generate enough income.”

King’s position on the tax cuts has changed in the last several months.

He initially said the tax cuts for upper-income Americans should be allowed to expire. But he has since said the economy is too fragile to increase those taxes now.

“I’m reluctant to even do that now. These recent job reports have been so weak,” King said.

King said Congress should set a level of job growth or economic growth that would trigger a tax rate increase for earnings over $250,000.

“One of the problems we’re seeing here are these arbitrary dates (for the cuts to expire). It creates an artificial crisis,” he said. “It should be related to the strength of the economy.”

Maine’s three lesser-known independent Senate candidates have a wide spectrum of opinions.

Andrew Ian Dodge, a tea party activist from Harpswell, said he favors extending all of the cuts.

“I believe that the Bush tax cuts should remain and be expanded,” Dodge said. “Raising taxes in this economy would be nuts and prolong the recession.”

Danny Dalton, a business owner in Bath and a former anti-terrorism contractor, said he wants to end them all.

“The Bush tax cuts were a mistake to begin with and they didn’t induce higher economic growth,” he said. “They did have the regrettable consequence of reducing revenues and thereby raising deficits.”

Steve Woods, a businessman who’s the town council chairman in Yarmouth, said he would allow the cuts to expire for those earning more than $250,000, even though he is in that category himself.

“It is impossible to reverse our economic trend without some combination of increased revenue and meaningful reductions in spending,” he said. “While no one desires to pay more taxes, the wealthiest Americans are in a better position to shoulder more of that burden.”

Staff Writer John Richardson can be contacted at 791-6324 or at:

jrichardson@pressherald.com

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