Following a spate of moribund economic news and the looming Taxmageddon that could further derail the sluggish U.S. economy, President Obama called on Congress yesterday (Monday) for help.
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.
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GOP Slams President Obama's Taxmageddon Proposal
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Taxmageddon Just Got More Frightening
Political battles will take center stage in the second half of 2012, but few loom larger than the scheduled tax increases - "Taxmageddon" - set to take effect in January 2013.
Bush-era tax cuts, payroll tax breaks and other provisions set to expire next year could pack an enormous financial hit, harming the already-fragile U.S. economy and thousands of struggling families. While Democrats and Republicans alike are opposed to letting all the cuts expire, they disagree on exactly what to do about it.
Republicans blame U.S. President Barack Obama and his administration for the stalemate.
Sen. John Cornyn, R-TX, has said Republicans want to extend all of the Bush tax cuts, including the "big-ticket" ones, and even some Democrats support reform of the entire tax code, but "the bad news is that President Obama is missing in action."
"Unless Congress and the president act, January will bring us the largest tax increases in American history-a tax increase of approximately $500 billion," Cornyn said in a weekly radio address last week.
President Obama wants to end the Bush-era tax cuts for individuals making more than $200,000 a year and couples making more than $250,000 annually. The move is aimed to garner more revenue for a government saddled with growing federal debt. The president has said that wealthier Americans are in a position to help.
But Taxmageddon will fall principally on middle and low income Americans because 60% of the Bush tax cuts went to middle- and low-income taxpayers.
Cornyn said in the Republican radio address, "Make no mistake, every single working American will see his or her taxes go up on January 1 absent action. Family budgets will be squeezed even tighter. Disposable income will shrink. And many jobs will be destroyed."
The uncertainty over federal taxes has weighed on the U.S. economy, Cornyn added.
"Raising taxes is the last thing we should do amid the weakest economic recovery since World War II," he said. "Unfortunately, even if we avoid the full "Taxmageddon" scenario, President Obama's health care law also contains a new surtax on investment that will take effect in 2013. This new surtax will hamper small business investment, which is the lifeblood of private sector job creation."
Bush-era tax cuts, payroll tax breaks and other provisions set to expire next year could pack an enormous financial hit, harming the already-fragile U.S. economy and thousands of struggling families. While Democrats and Republicans alike are opposed to letting all the cuts expire, they disagree on exactly what to do about it.
Republicans blame U.S. President Barack Obama and his administration for the stalemate.
Sen. John Cornyn, R-TX, has said Republicans want to extend all of the Bush tax cuts, including the "big-ticket" ones, and even some Democrats support reform of the entire tax code, but "the bad news is that President Obama is missing in action."
"Unless Congress and the president act, January will bring us the largest tax increases in American history-a tax increase of approximately $500 billion," Cornyn said in a weekly radio address last week.
President Obama wants to end the Bush-era tax cuts for individuals making more than $200,000 a year and couples making more than $250,000 annually. The move is aimed to garner more revenue for a government saddled with growing federal debt. The president has said that wealthier Americans are in a position to help.
But Taxmageddon will fall principally on middle and low income Americans because 60% of the Bush tax cuts went to middle- and low-income taxpayers.
Cornyn said in the Republican radio address, "Make no mistake, every single working American will see his or her taxes go up on January 1 absent action. Family budgets will be squeezed even tighter. Disposable income will shrink. And many jobs will be destroyed."
The uncertainty over federal taxes has weighed on the U.S. economy, Cornyn added.
"Raising taxes is the last thing we should do amid the weakest economic recovery since World War II," he said. "Unfortunately, even if we avoid the full "Taxmageddon" scenario, President Obama's health care law also contains a new surtax on investment that will take effect in 2013. This new surtax will hamper small business investment, which is the lifeblood of private sector job creation."
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