Mid-day Monday, President Obama announced his plan for the Bush tax cuts, the depressed tax rates that became law in 2003 that were extended last year. When they finally expire at the end of 2012, Obama will say, they should be extended only for those making less than a quarter-million dollars annually. For everyone else, they should go away permanently. “I’m not proposing anything radical here,” Obama said in the East Room of the White House. “I’m just proposing that anyone making $250,000 a year should go back to the tax rates we were paying under Bill Clinton.”
Obama signed a bill in 2010 to extend all of the Bush-era tax cuts until the end of 2012, citing the need for economic stimulus at the time. He has since vowed he would not permit another extension of the lower tax rates for wealthy Americans. His proposal Monday would maintain the current lower tax rates for families making up to $250,000 for another year while allowing tax rates to return to 1990s levels for those earning more.
President Barack Obama revitalized his push for holding down middle-class tax rates Monday, calling on Congress to pass a one-year extension of the Bush-era tax cuts for people earning less than $250,000 a year. In a White House statement delivered while people described as working Americans stood behind him, Obama said his proposal would provide the certainty of no tax increase next year for 98% of Americans.
It's long been President Obama's position that the so-called Bush tax cuts that expire at the end of this year should only be extended for families with incomes of less than $250,000 a year. And it's long been the position of House Speaker John Boehner and other leading Republicans that none of the Bush-era cuts should be allowed to expire — they should be extended for everyone, regardless of income. Obama makes the case that the wealthy can afford to pay more and that asking them to do that will help narrow federal budget deficits. Boehner and his fellow Republicans make the case that with the economy still seeming to stutter and job growth remaining weak, now's not the time to ask more of any taxpayers.
In December 2010, Mr. Obama reached a deal with Republicans that extended the tax cuts at all income levels through the end of 2012 (they expire Jan. 1, 2013) as part of a package that would also keep benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year and take other steps to bolster the economy. It also continued tax breaks on dividends and capital gains, and lowered the estate tax. In September 2011, Mr. Obama again proposed ending the tax breaks for taxable income above $250,000 per household as part of a $3 trillion deficit reduction plan.
The president used his remarks on the jobs numbers Friday to make another call for extending tax cuts on the first $250,000 of household income, carved out from the entire Bush tax cuts. That’s a measure the Senate backed, but House Republicans earlier this week passed a measure extending all the Bush tax cuts and roasted Democrats as supporting a huge tax hike at the worst possible time.
Repeal Bush tax cuts for households earning more than $250,000. Lower taxes on manufacturing industry. Stimulus spending and tax cuts to grow the economy (short term). Cut spending and raise taxes on wealthy to reduce deficit (long term).
“Now, I'm proposing real, serious cuts in spending. When you include the $1 trillion in cuts I've already signed into law, these would be among the biggest cuts in spending in our history. But they've got to be part of a larger plan that's balanced --- a plan that asks the most fortunate among us to pay their fair share, just like everybody else. And that's why this plan eliminates tax loopholes that primarily go to the wealthiest taxpayers and biggest corporations --- tax breaks that small businesses and middle-class families don't get. And if tax reform doesn't get done, this plan asks the wealthiest Americans to go back to paying the same rates that they paid during the 1990s, before the Bush tax cuts. I promise it's not because anybody looks forward to the prospects of raising taxes or paying more taxes. I don't. In fact, I've cut taxes for the middle class and for small businesses, and through the American Jobs Act, we'd cut taxes again to promote hiring and put more money into the pockets of people. But we can't afford these special lower rates for the wealthy --- rates, by the way, that were meant to be temporary.”
There has to be a restoration of balance in our tax code. We are going to offset some of the payroll taxes that families who are making less than $50,000 a year get a larger break. I want to make sure that seniors making less than $50,000, that they get some relief in terms of the taxes on their Social Security. Those kinds of progressive tax steps, while closing loopholes and rolling back the Bush tax cuts to the top 1 percent, simply restores some fairness and a sense that we’re all in this together.
The Bush tax cuts give those who earn over $1 million dollars a tax cut nearly 160 times greater than that received by middle-income Americans. At the same time, this administration has refused to tackle health care, education and housing in a manner that benefits the middle class. Barack Obama and Joe Biden's Plan: Jumpstart the Economy. [...] Obama and Biden will cut income taxes by $1,000 for working families to offset the payroll tax they pay. Provide a Tax Cut for Working Families: Obama and Biden will restore fairness to the tax code and provide 150 million workers the tax relief they need.”