Daily Tax Update - July 9, 2012: President Calls for One-Year Extension of Middle-Income Tax Cuts

PRESIDENT CALLS FOR ONE-YEAR EXTENSION OF MIDDLE-INCOME TAX CUTS:  Today, in a speech at the White House, President Obama urged Congress to pass a one-year extension of the Bush-era tax cuts for families making less than $250,000 a year, while allowing rates to rise for higher earners.

  • Obama said, ". . . I believe it’s time to let the tax cuts for the wealthiest Americans -- folks like myself -- to expire.  And, by the way, I might feel differently -- because it’s not like I like to pay taxes.  I might feel differently if we were still in surplus.  But we've got this huge deficit, and everybody agrees that we need to do something about these deficits and these debts.  So the money we're spending on these tax cuts for the wealthy is a major driver of our deficit, a major contributor to our deficit, costing us a trillion dollars over the next decade.  By the way, these tax cuts for the wealthiest Americans are also the tax cuts that are least likely to promote growth.  So we can’t afford to keep that up, not right now.  So I’m not proposing anything radical here.  I just believe that anybody making over $250,000 a year should go back to the income tax rates we were paying under Bill Clinton -- back when our economy created nearly 23 million new jobs, the biggest budget surplus in history, and plenty of millionaires to boot."
  • Obama added, "[M]y message to Congress is this:  Pass a bill extending the tax cuts for the middle class; I will sign it tomorrow.  Pass it next week; I’ll sign it next week.  Pass it next -- well, you get the idea.  As soon as that gets done, we can continue to have a debate about whether it’s a good idea to also extend the tax cuts for the wealthiest Americans.  I’ll have one position.  The other side will have another.  And we’ll have that debate, and the American people can listen to that debate.  And then next year, once the election is over, things have calmed down a little bit, based on what the American people have said and how they’ve spoken during that election, we’ll be in a good position to decide how to reform our entire tax code in a simple way that lowers rates and helps our economy grow, and brings down our deficit -- because that’s something that we’re going to have to do for the long term."
  • The House plans to vote later this month on whether to extend the expiring tax cuts for all income levels for a year.
  • In reaction to the President’s remarks, House Ways and Means Chairman Dave Camp said, "Republicans have called for a fairer, flatter and simpler tax code that lowers rates, gets rid of lobbyist loopholes and creates more economic growth and jobs.  The President is simply calling for higher taxes on families, small businesses and investors, which will only further weaken an already fragile economy.  His support for another job-killing tax hike will only provide Washington more money to feed its insatiable appetite for reckless spending.  The answer to our weak economy is not to take more money from Americans – the answer is to put American families and job creators first.  House Republicans will vote this month to stop the tax hike on every American and create a path for tax reform that levels the playing field for the hardworking Americans and businesses trying to compete in a global economy."
  • Finance Committee Chairman Max Baucus said, "Extending the middle-class tax cuts will provide a much-needed sense of certainty to millions of families and our economy.  At the same time, we need to work to overhaul the nation’s tax code to reduce the deficit, create jobs and strengthen the economy.  That is what the nation needs to get back on track."
  • The President’s remarks can be accessed here.

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