President Obama proposed that Congress pass a one-year extension of the Bush-era tax cuts set to expire at year's end for households earning $250,000 or less. He suggested letting the cuts expire for the wealthiest bunch.
"We don't need more top-down economics," the president said in an early afternoon press conference at the White House. "We tried that theory...we can't afford to go back to it. That's why I believe it's time for the cuts for the wealthiest Americans, including myself, to expire."
The Bush-era tax cuts, set up as a temporary measure, are due to expire on Dec. 31, meaning if they do the majority of Americans will see a steep rise in taxes overnight. A number of other tax increases are also set to take effect, giving the event the ominous Taxmageddon moniker.
The implications are huge. Families living paycheck to paycheck, or unemployment check to unemployment check, will be even more strapped. The result is an almost certain recession.
By extending the middle class tax cuts, Congress gets more time to come up with a more comprehensive tax-reform plan. It also affords Congress more time to figure out a way to deal with the ballooning national debt without messing with struggling households during a delicate economic period.
Election 2012 Focuses on Taxmageddon
The move is a clever one for the president as he seeks re-election. The pitch, however, is not likely to sail through Congress with Republicans in control. While not prepared to ink an abrupt tax hike and needing more time, Republicans are instead pushing for a tax break for everyone.
In reference to Romney, President Obama said, "My opponent will fight to keep them in place; I will fight to end them."
Republicans, in favor of a tax break for the masses, will be sure to muscle Congress, no matter who wins in November, for an extension of the lower tax rates for all earners, not simply those with incomes below the suggested $250,000 threshold. And if Romney is our next commander-in-chief it is even more likely that tax cuts will be extended to even the wealthiest Americans.
Andrea Saul, Romney's campaign spokesperson, told MSNBC, "President Obama's response to even more bad economic news is a massive tax increase. The president's latest bad idea is to raise taxes on families, job creators, and small businesses. Almost half a million fewer Americans are working today than the day Barack Obama took office, and we've just come through the worst job creation in two years."
In rebuttal, the president chimed in, "This isn't about taxing job creators; this is helping job creators."
The GOP maintains President Obama's latest move is a way to deflect from the glum U.S. jobs report for June released Friday. The Labor Department reported a paltry 80,000 jobs were added in the month, far below expectations and a sure sign the robust growth enjoy during the first quarter was a head fake.
"Unlike President Obama, Governor Romney understands that the last thing we need to do in this economy is to raise taxes on anyone. He has a plan to permanently lower marginal rates, help middle-class Americans save and invest, and jumpstart economic growth and job creation," Saul added.
While the president preaches on his campaign trail that the wealthy need to pay "their fair share" in an effort to decrease the country's mushrooming fiscal debt, Camp Romney lectures that the solution to our country's problems should instead focus on minimizing the size of the government.
Perhaps Thomas Jefferson said it best: "Excessive taxation will carry reason and reflection to every man's door, and particularly in the hour of election."
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