"Most Americans would gladly pay the same taxes they paid under President Bill Clinton if they could just get the Clinton economy back," said former Vermont governor Howard Dean.
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In contrast, Democrats running as moderates have proposed raising taxes only on the wealthy, while cutting them elsewhere, and they plan to make middle-class tax increases an issue in the Democratic primaries. Sen. Bob Graham (Fla.) would move the highest tax bracket -- 35 percent -- back to the 38.6 percent that it was before this year's tax cut, while instituting a "millionaire's tax bracket" of 40 percent. Graham would also repeal the capital gains and dividend tax cuts signed into law last month.
Sen. John Edwards (N.C.) has taken a similar approach, calling for the top two tax brackets to be returned to their pre-Bush levels of 39.6 percent and 36 percent from the current 35 percent and 33 percent. He would scrap the 15 percent tax on dividends created this year, treating dividends once again as taxable income. And for people making more than $250,000 a year, Edwards would raise the capital gains rate up from the new 15 percent rate and even higher than the 20 percent rate Bush inherited, to 25 percent. He would also retain taxation on large inheritances, scuttling the law that would repeal the estate tax in 2010.
Though less specific, Kerry and Sen. Joseph I. Lieberman (Conn.) have suggested raising the top two income tax rates -- which begin for couples at $174,700 of taxable income -- to pre-Bush levels and retaining taxation of very large estates.
Only Lieberman has deliberately tried to avoid the issue. In speeches, the former vice presidential nominee has outlined policies on high-technology investment, poverty fighting and reversing the disastrous decline of manufacturing. In a detailed tax-policy speech likely to be given this fall, Lieberman will call for some tax increases for the wealthy, a campaign source said.
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