The tax cuts that President Bush enacted in 2001 and 2003 are about to expire, and with the U.S. deficit expected to rise to $1.47 trillion this year, there's a fight brewing about whether to let that happen.
Most Republicans want to renew all of Bush's tax cuts. Obama has proposed that we keep taxes low for the "middle class" (bizarrely defined as individuals earning less than $200,000 and families earning less than $250,000) but to restore the higher tax rates on people making more than that.
The chart above (from The Wall Street Journal) might help you make sense of the debate. It shows what taxes will be like for different earners in 2011 if we renew the Bush tax cuts (that's the red bar) and if we adopt Obama's proposal (that's the blue bar). As you can see, Obama's proposal would actually lower taxes for many less wealthy people.
And for the record, as the chart below shows, in both of these scenarios the tax rates for the wealthiest people are still among the lowest in the last half-century.
Via Matt Yglesias