Obama: Not rich; GOP: Everybody
WASHINGTON — President Barack Obama on Monday urged Congress to extend tax cuts for one year for all those except American families making more than $250,000 a year.
While Republicans seized on the president’s proposal as a massive tax increase, Obama argued letting tax cuts expire for the wealthiest 2 percent of Americans would help cut into the federal deficit.
“Many members of the other party believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth,” Obama said. “I think they’re wrong. I believe our prosperity has always come from an economy that’s built on a strong and growing middle class.”
Congressional Republicans balked, saying it would be a mistake to raise taxes on anyone while the economy was still struggling to recover.
The House GOP plans to make its own push this summer for a full extension of the tax cuts.
GOP presidential candidate Mitt Romney did not directly address the move Monday, but his campaign spokeswoman, Andrea Saul, said the president was responding to the bad economic news by calling for a “massive tax increase.”
Several members of the Louisiana congressional delegation also criticized Obama.
U.S. Sen. David Vitter, R-La., quickly put out a prepared statement accusing Obama of hurting small businesses.
“This would be the single biggest tax increase in U.S. history — $850 billion — with much of that on the backs of small businesses, which pay through the individual rate,” Vitter stated.
“Obama said we shouldn’t do that in late 2010 because the economy was so weak — yet growth is weaker now than then. It also seems clear all those in the middle class can count on a tax increase if Obama is reelected with his limited one-year reprieve.”
U.S. Sen. Mary Landrieu, D-La., offered her support of the president in a prepared statement, although she left the window open to support a greater threshold than $250,000.
“With the economy still recovering, this is not the time to raise taxes on middle-class families,” Landrieu stated. “I support efforts to extend the current tax rates for the 98 percent of Louisianians who earn less than $250,000 per year. At the same time, extending tax cuts for the middle class will also protect 97 percent of America’s small business owners who earn less than $250,000 per year.
“If we can afford to do more, given the fiscal pressures on our budget, we will make every effort,” she added.
Extending the tax cuts only for households making below $250,000 would save the government about $800 billion over 10 years.
Extending the tax cuts for everyone would cost the government about $4.5 trillion over a decade.
About 2.5 million U.S. households had incomes of $250,000 annually or more, according to the 2010 census. The median household income in 2010 was $49,445.
U.S. Reps. Steve Scalise, R-Jefferson, and Jeff Landry, R-New Iberia, both linked the tax cuts to Obama’s health-care law, which House Republicans are trying to repeal this week even though any such legislation will not move in the Senate before the November elections.
“President Obama proved once again that he is tone deaf to the country’s economic woes by insisting on more job-killing tax hikes, especially in the wake of another poor jobs report and the recent Supreme Court ruling which confirms Obamacare includes hundreds of billions of dollars in tax increases that hits hard-working taxpayers,” Scalise said.
“The president is trying to deflect the fact that Obamacare is a huge, billion-dollar tax increase on the middle class,” Landry added. “If the president really wants to reduce taxes on the middle class like I do, he would work with me to repeal Obamacare.”
Obama said the results of the tax cuts for the wealthy are hurting the country.
“The wealthy got wealthier, but most Americans struggled,” Obama said. “Instead of creating more jobs, we had the slowest job growth in half a century. Instead of widespread prosperity, the typical family saw its income fall.”
Obama is well-off and acknowledges it.
At one point Monday, he said, “It’s time to let the tax cuts for the wealthiest Americans, folks like myself, to expire.”
The Associated Press
contributed to this report.