12:03 AM PDT on Sunday, September 19, 2010

By BEN GOAD
Washington Bureau

WASHINGTON – Inland Southern California’s federal lawmakers are divided over a plan to raise taxes for the wealthiest Americans amid a lingering economic crisis that has hit the region as hard as anywhere in the nation.

Back from its summer break, Congress is steeling for a pre-election fight over whether to extend George W. Bush-era tax cuts that are set to expire at the end of the year. Most Republicans want to extend all the cuts, while most Democrats, led by President Barack Obama, want to extend them for all but the rich.

Under Obama’s plan, people earning $200,000 or more annually and families making at least $250,000 would have to pay more taxes. The amount would vary depending on their income. Individuals or households whose earnings are below that threshold would see no change in federal income tax.

Only a fraction of people across the Inland area would see their taxes rise under the plan. In 2006, the most recent year for which data are available, 29,148 individuals and families in Riverside County — about 2.7 percent of tax filers — collected taxable income in excess of $200,000, according to figures from the California Tax Franchise Board. That number was even lower in San Bernardino County, where 20,054 tax filers — roughly 2.0 percent — surpassed the amount that year.

Rep. Joe Baca, whose district is comprised of mostly blue-collar towns across the San Bernardino Valley, said he supports the plan to spare working- and middle-class Americans, while allowing the tax cuts to expire for top earners.

“The fact is, these high-end tax cuts have not created jobs or stimulated economic growth,” said Baca, D-Rialto. “It is imperative we allow these tax breaks for the wealthy to expire so we can begin the process of bringing down our long-term deficits.”

Though relatively few households would face tax increases, Obama’s plan would be disastrous for recovery efforts, because top earners represent a large percent of economic investment, Rep. Ken Calvert said.

“Allowing these tax hikes on the highest bracket would mean hurting the very people we’re counting on to get us back on track,” said Calvert, R-Corona. “It’s economically insane.”

Inland Reps. Mary Bono Mack, R-Palm Springs, Jerry Lewis, R-Redlands, and Darrell Issa, R-Vista, also support the extension of all the Bush tax cuts.

“We’ve got to be fighting for all the tax cuts, and that’s what I support,” Bono Mack said. “In a bad economy you don’t increase taxes on people.

At 14.8 percent, the Inland area’s unemployment rate is well above the national rate of 9.6 percent. Given the joblessness throughout the region, and across the country, Lewis said the cuts should be extended for at least two years for all income tax brackets. He said Democrats’ insistence on fighting against a complete extension would come at their own peril.

“It’s pretty apparent to the majority’s membership that a tax increase at this point — as the economy is so soft — would be a big mistake,” Lewis said. “It’ll cost us jobs, not increase jobs.”

Said about spending

Issa, whose district includes Temecula, Lake Elsinore and Perris, described Obama’s plan as promoting “class warfare,” saying it would penalize only certain taxpayers, including lower- or middle-class workers who have one particularly good year.

“The people of my district and, particularly the people of Riverside County — they get it,” Issa said. “The problems in Washington and the problems in Sacramento are too much spending, not that there isn’t enough revenue already being taken from people.”

Questions about Republican solidarity on the issue arose last weekend, following remarks by the top House Republican. Minority Leader John Boehner, R-Ohio, said during a Sunday morning talk show that, while he prefers extending all the tax cuts, he might not oppose Obama’s plan if that’s the only option on the table.

Since then, several Republicans have maintained that the party is unified against a tax increase for any American.

Party solidarity?

“We all agree that all of the Bush tax cuts need to be extended,” Bono Mack said.

Boehner’s counterpart in the Senate, Sen. Mitch McConnell, R-Ky, has said that every GOP senator will vote against the legislation proposed by the president. Meanwhile, there are signs that support from Democrats for the plan is less firm.

Some Democrats favor a higher threshold, saying residents in places with a high cost of living should be protected. Among them, Sen. Barbara Boxer, D-Calif., said this week she supports extending the cuts for anyone who makes less than $1 million annually.

“I think millionaires can pay more, but most of our Californians really need this tax relief to continue,” said Boxer, who faces a tough re-election fight against conservative Republican Carly Fiorina.

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