President Barack Obama on Monday called on Congress to extend Bush-era tax cuts, but only for those earning less than $250,000 per year.
“Let’s not hold the vast majority of Americans hostage while we debate the merits of another tax cut for the wealthy,” the president implored at the White House while surrounded by a dozen people administration officials said would directly benefit from such an extension.
“I believe prosperity comes from an economy that’s built on a strong and growing middle class,” Obama stated.
The extension sought by the president would last for one year. It would apply to households earning less than $250,000 annually. Obama said that this November’s election would decide whether or not those earning more than that amount would continue to receive tax cuts implemented during the George W. Bush administration.
“My opponent will fight to keep them in place. I will fight to remove them,” Obama said, referring to presumed GOP presidential candidate Mitt Romney, a staunch supporter of tax cuts for the wealthy.
The Romney campaign responded to the president’s call by issuing a statement accusing him of raising taxes, arguing that an extension on tax cuts for lower-earning households amounts to a tax hike on those making more than $250,000.
“President Obama’s response to even more bad economic news is a massive tax increase. It just proves again that the president doesn’t have a clue how to get America working again and help the middle class. The president’s latest bad idea is to raise taxes on families, job creators and small businesses.”
In addition to his call to extend tax cuts for the middle class, Obama campaign officials also announced that they would “amplify the president’s message on middle class tax cuts” by hosting events in battleground states throughout the week.
In 2010, President Obama signed an extension of the Bush-era tax cuts for all Americans through the end of 2012 in a bid to stimulate the moribund economy. But he has since announced that he supports raising taxes on the wealthy as a means of reducing the massive federal deficit.
Obama also backs the so-called ‘Buffett Rule,’ named after billionaire investor Warren Buffett, who posits that no household making more than $1 million a year should pay less tax than a middle class family.
Like Buffett, the president has decried the fact that his secretary is taxed at a lower rate than he is.
Those who advocate higher taxes on the rich also point out that many millionaires and billionaires effectively pay little or no taxes at all, with more than 1,400 U.S. households with reported incomes over $1 million paying no federal income taxes in 2009.
Conservatives counter that raising taxes on the wealthy stifles economic growth by making the rich, the “job creators,” wary of hiring and less likely to spend. They argue for lower taxes, less government regulation and greater fiscal restraint.