Obama urges tax cuts for families under $250,000
Monday, July 9, 2012
WASHINGTON (AP) — President Barack Obama, eager to shift election-year attention away from the nation’s lackluster jobs market, called on Congress Monday to extend tax cuts for families earning less than $250,000 a year while allowing taxes to rise for households making more.
“Let’s not hold the vast majority of Americans and our economy hostage while we debate the merits of another tax cut for the wealthy,” said Obama, flanked by a dozen people the White House said would benefit from the tax cut extension advocated by the president.
Obama wants Congress to pass a one-year extension of the Bush-era tax cuts for households making less than $250,000 before they expire at the end of the year. He said the outcome of his November election contest with Republican rival Mitt Romney would then determine the fate of the tax cuts for higher income earners.
“My opponent will fight to keep them in place. I will fight to end them,” he said.
White House spokesman Jay Carney said Obama “would not sign” a bill that extended the whole range of tax cuts in full.
Out of 118.7 million U.S. households in 2010, about 2.5 million had incomes of $250,000 or more, according to estimates by the Census Bureau. The median household income was $49,445, which means equal numbers of households earned less and more.
Obama has long supported ending the tax cuts for those making more than $250,000. But the White House and the president’s re-election team are reviving his arguments now as a way to paint congressional Republicans as obstructionists and Romney as a protector of the wealthy, suggesting the GOP push for an across-the-board extension of the tax cuts puts the middle class at risk.
Romney supports extending the tax cuts for all income earners. His campaign spokeswoman Andrea Saul said Monday that Obama’s proposal amounted to a “massive tax increase” and proved that the president “doesn’t have a clue how to get America working again and help the middle class.”
The contours of the tax debate are largely the same as they were when the cuts were due to expire at the end of 2010. While Obama opposed an extension for higher income earners then as well, he ultimately agreed to full two-year extension, in part to win concessions for other legislation.
Democrats see the tax debate as part of a larger coordinated attack on Romney.
The strategy is aimed at portraying Romney, whose personal wealth could exceed $250 million, as disconnected from middle-class voters.
Romney aides say the Democratic attacks on the presumptive GOP nominee’s wealth an “unfounded character assault.”
Republican lawmakers immediately balked at Obama’s call for a partial extension.
“No one should see an income tax hike next year — not families, not small businesses and other job creators,” said Senate Minority Leader Mitch McConnell, R-Ky.
The president’s pitch may also face some opposition from congressional Democrats. House Minority Leader Nancy Pelosi, D-Calif., and Sen. Charles Schumer, D-N.Y., a member of his party’s Senate leadership, have both advocated denying the tax cut extension to those making above $1 million annually.
Extending the tax cuts only for households making below $250,000 costs the government about $800 billion less over 10 years than extending them for everyone. The full cuts cost the government about $4.5 trillion over a decade.
Obama was to continue the tax debate Tuesday during a campaign trip to Iowa. His re-election team was also promoting the president’s tax policy at a series of events this week in battleground states, including New Hampshire, Colorado and Nevada.
The Bush-era tax cuts are due to expire at the end of the year unless Congress votes to extend them. Economists worry that across-the-board tax increases, along with automatic spending cuts also scheduled to take hold at year’s end, could be a blow to the shaky U.S. economy.
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