President Obama called Monday for Congress to pass another one-year extension of tax cuts for household incomes less than $250,000 in the coming weeks. This plan would leave the issue of whether to extend the cuts to everyone until after the election.
In January, the 2-year extension on the Bush tax cuts that President Obama and Congress agreed on in 2010 will end.
Obama said that extensions for the rich are “least likely to promote growth” and are a key reason why the federal government has shifted from the surpluses of the 1990s to the deficits that began during George W. Bush’s presidency and continue today. “We can’t afford to keep that up, not right now,” he said. “I just believe that anybody making over $250,000 should go back to the income tax rates we were paying under Bill Clinton.”
The president claims that 98 percent of families and 97 percent of small businesses would benefit from the extension; while the smaller percentage would see their taxes go up.
Romney campaign spokeswoman Andrea Saul said the president’s plan would “raise taxes on families, job creators and small businesses.” In contrast, Romney “understands that the last thing we need to do in this economy is raise taxes on anyone. He has a plan to permanently lower marginal rates, help middle-class Americans save and invest, and jump-start economic growth and job creation.”
The decision of whether to extend the tax cuts for those Americans making more than $250,000 a year is part of the controversy in the presidential race and is another outcome that will be determined by the winner in November.
Obama is facing resistance from Republicans as well as some Democrats on his plan, including House Minority Leader Nancy Pelosi (D-Calif.) and Senator Chuck Schumer (D-N.Y.). Both have stated that they’d like to see the cuts extended for anyone making less than $1 million a year as opposed to $250,000.
A congressional report said that the tax cuts, in addition to a series of automatic budget cuts all taking place in 2013 would probably send the economy into another recession.
The president will be traveling and speaking on this topic later this week.