Obama sets stage for new tax cut debate

President Barack Obama calls on Congress to pass a temporary, one-year extension of the Bush-era tax cuts for people who make less than $250,000 a year, during a statement in the East Room of the White House in Washington, Monday, July 9, 2012.

/ AP Photo/Susan Walsh

Updated: 2:54 p.m. ET

(CBS News) Pivoting from the news of last week's tepid jobs report, President Obama on Monday proposed a one-year extension of Bush-era tax cuts for Americans making less than $250,000, reiterating his calls to let tax cuts for high-earning Americans expire, and reopening a politically contentious debate that is likely to result in a drawn-out congressional battle just months before the November election.

Mr. Obama, speaking from the East Room of the White House, argued that top-down economics favored by many Republicans simply "didn't work," and that "I believe our prosperity has always come from an economy that's built on a strong and growing middle class." 

"We don't need more top-down economics. We've tried that theory. That's why I believe it's time to let tax cuts for the wealthiest Americans, folks like myself, to expire," he said.

He stressed that most Americans favor extending the cuts for the middle-class, and that debate over the extending them for the wealthy should not hold up action on the former.

"We all say that we should extend tax cuts for 98 percent of the people...so we should all agree to extend the tax cuts for the middle class," he said. "Let's not hold the vast majority of Americans and our entire economy hostage while we debate the merits of another tax cut for the wealthy... We can have that debate, but let's not hold up working on the thing that we already agree on."

The proposal, which would allow the tax cuts to expire for all those earning more than $250,000, is at odds with a House Republican proposal up for a vote this month, which would extend the tax cuts for all Americans regardless of their income level.

Both Mr. Obama's and the GOP's proposal would have to pass through Congress, however, in order to be enacted -- and both proposals are likely to face fierce opposition from the other side.

White House spokesperson Jay Carney told reporters Monday afternoon that even if a version of the bill extending tax cuts for the wealthy did pass through Congress, the president would veto it. 

"What the president's proposing is therefore a massive tax increase on job creators and on small business," said presumptive Republican presidential nominee Mitt Romney, in a radio interview. "We just saw a terrible jobs report just last week and now to add a higher tax on job creators and on small business is about the worst thing I could imagine to do if you want to create jobs."

Echoing that sentiment in a statement, House Speaker John Boehner blasted Mr. Obama for "doubling down on his quixotic call for the same small businesses tax hikes that have been routinely rejected by the House and Senate" despite June's "weak jobs report." 

"How will these small business tax hikes create jobs?" he asked. "Even Democratic congressional leaders and former President Clinton have turned their back on this proposal."

A handful of congressional Democrats, including House Minority Leader Nancy Pelosi, D-Calif., and New York Democratic Sen. Chuck Schumer, have suggested that the tax cuts should be extended for Americans earning up to $1 million a year. But a Democratic aide dismissed the notion that some Democrats are at odds with the president's plan.

"Give me a break. We've had 250k in our budget. GOP said no. We offered a million and GOP said no," the aide told CBS News. "Point it is we support extension of [middle class tax cuts] and GOP doesn't."

Senate Majority Leader Harry Reid, D-Nev., who was among the Democrats to support the million dollar cap, also affirmed his support in a Monday statement.

"I agree with President Obama that we should extend tax cuts for all American families up to the first $250,000 of income immediately," Reid said. "Democrats and Republicans should be able to agree that protecting the middle class is the most important priority, so Republicans should stop holding these middle-class tax cuts hostage to extract more reckless giveaways for millionaires and billionaires."

Mr. Obama has long called for a rollback of the controversial Bush-era tax cuts, and in 2008 campaigned on a promise to end the cuts for "the wealthiest Americans" while upholding them for those earning $200,000 or less. In December 2010, however, citing a lame duck congressional stalemate, the president agreed to extend the cuts for all taxpayers. The cuts expire at the end of 2012, and Mr. Obama has repeatedly said that he will not re-up them for America's highest earners.

Economists are divided on the impact of ending some of the tax cuts on America's prospects for economic growth, but Lawrence Summers, who led the White House National Economic Council in early years of the Obama administration, said last month that Congress should temporarily extend the tax cuts set to expire at the end of the year.

"We've got to make sure that we keep providing energy to the economy. In the areas where we have done that, like manufacturing, with the support for the automobile industry, we haven't had great results, but we have had much better results," Summers said.

Former president Bill Clinton made similar remarks, although he later clarified that he only believes the tax cuts should be extended for middle-class Americans.

Andrea Saul, a campaign spokesperson for Romney, pointed to Mr. Obama's proposal as evidence that "the President doesn't have a clue how to get America working again and help the middle class."

Senate Minority leader Mitch McConnell, R-Ky., meanwhile, accused the president of making a "a political calculus, not an economic one," in proposing the tax cut.

Republican strategist Trey Hardin contends that the president's proposal, while strategically timed, merely represents "the beginning of a number of salvos that you're going to see from both parties that's aimed at trying to score political points and put the other side in an uncomfortable position leading up to the election."

"I think that this proposal is a step to start drawing some lines in the sand," Hardin told CBS News. "This starts to frame the debate that we'll see over the next couple of months. Both Obama and Romney have this burden explaining to voters what their plan is to get the economy back on track and to get people feeling good about things in this country again."

For Obama, it also presents an opportunity to paint Republicans as unwilling to compromise and beholden to America's wealthiest citizens.

"The majority of Americans want to extend the tax cuts for the middle-class and do think the wealthy ought to pay their fair share," said Democratic strategist Mark Mellman. "This is an issue on which most Americans agree."

"The question for Republicans is, are they going to hold these tax cuts for the middle-class hostage to tax cuts for the wealthiest Americans?" he added. "My guess is they're hostage-takers, and they will."

Whether or not Mr. Obama's proposal gains traction in Congress before the end of the current session -- and both Hardin and Mellman were skeptical that it would -- Hardin says that coming forth with the proposal nevertheless gives the president a chance to frame the debate, and to contrast his position on the issue as compared to his opponent's.

For Romney, he argues, that means proposing a specific vision for fixing the economy.

"I think for Romney it just can't be about being a referendum on Obama," he said. "Solely running on an anti-Obama referendum is not enough. I think there's too many independent voters out there who are paying closer attention than they ever have. And they want details. This isn't a popularity contest anymore."

[hillzhavays]

by occupy_cbs July 10, 2012 9:33 PM EDT
You fox/rush parrot have been outed, and your posts are shameful! LOL!
______________________________

#3 I think, on the list of sure-fire ways to determine whether a Lib has been confronted with a fact they don't like:

Use of the word "Parrot", "Fox", "Rush" in their response. Use of all three confirms beyond a reasonable doubt that they have indeed been confronted with a fact they don't like.

[LEAVA12]

Perhaps the Obama' Tax Plan is a catalyst for energizing patriots and Democrats to win back at least 25 seats in Congress this November. Perhaps this is the only way to make the job done.

http://change.gov/agenda/taxes_agenda/

Impact of the Obama Tax Plan
WHO TAX CUT
Married couple making $75,000 with two children, one of whom is in college $3,700
[includes $1,000 Making Work Pay; $500 universal mortgage credit; and $4,000 college credit net of current college credits]
Married couple making $90,000 $1,000
[$1,000 Making Work Pay tax credit]
Single parent making $40,000 with two young children and childcare expenses $2,100
[includes $500 Making Work Pay; $500 universal mortgage credit; and $1,100 from expansion of the child care tax credit]
70-year-old widow making $35,000 $1,900
[reflects elimination of income taxes for seniors earning under $50,000]

Source: Calculations based on IRS Statistics of Income. Tax savings is conservative; does not account for up to $500 in savings from expanded Savers Credit and the $2,500 in savings per family from the Obama healthcare plan

[LEAVA12]

Sixth, the Obama Administration's average national debt is $1.4 trillion, which is exactly the what the patriot millionaires and billionaires can take of under Obama's plan. Moreover, taxes on the middle class and more generally those with income less than $1 million, corporate taxes, sale taxes. and fraud prevention may contribute about $1 trillion to the government revenues. Furthermore, the war in the Middle East may recently cost about $ 300 billion per year. Under Obama's troop withdrawal the government may have savings in the neighborhood of $ 300 billion per year.
It's indeed a feasible economic solution for the agenda of balancing the budget and gradually paying off the debt.

Seventh, due to the increasing government, the Obama Administration will be able to provide more stimulus plans to boost the economy. As soon as the economy is boosted, unemployment will be reduced, and millionaires will enjoy the increases in their income as well as their safety from crimes.

Eight, Obama's tax plan prevents the dangerous scenario of Congress's austerity agenda. The IMF's Christine Lagarde, the World Bank's Robert Zoellick, and the WTO's Pascal Lamy have the same economic viewpoint: Focus on policies which strengthen growth, employment, and the quality of life in every part of the world. Extreme austerity leads to a lack of demand and hence less supply; consequently more unemployment and slow growth. Austerity also means less quality of life. The economic austerity in Greece is a good lesson. Recently in Europe, spending is now preferred to austerity.
The greatest concern of austerity is a reversal of the current trend of economic recovery, which could result in an economic "Armageddon."

Indeed Obama's tax plan will work the best for the country, there is no question about it.

[LEAVA12]

Fifth, ironically on "Face the Nation" Sunday, Pawlenty said "Romney has provided some specifics: "He called for a 20 percent reduction across the board on individual income tax rates and for small businesses. He's been specific about his tax cuts for corporate tax rates now in America, some of the highest in the world."

According the nonpartisan Urban Institute and Brookings Institution, the cumulative decrease in income tax rates will be reduced to 20% with Romney's income tax plan:
The current rate of 10% will be reduced to 8%, 15% will be reduced to 12%, 25% will be reduced to 20%, 28% will be reduced to 22.4%, 33% will be reduced to 26.4%, and 35% will be reduced to 28% . Is it a feasible solution to reducing the deficit? Is it questionable to decrease the tax rate for millionaires? http://taxpolicycenter.org/taxtopics/romney-plan.cfm .

Based on Romney's tax cut plan for millionaires, a billionaire with annual income of $1 billion may save $150 million per year with the assumption he or she only pays a 20% tax rate after many loophole deductions. It sounds good to billionaires and therefore it could be a catalyst for the wealthy to financially support the Romney campaign.

[LEAVA12]

Fourth, the basic principles for a balanced budget and the gradual repayment of debt are that the government's revenue must be greater than its expenditures and we must have a strategy for economic growth. Indeed, the goal of raising the tax bracket for those with income over $250,000 is to raise government revenue, a critical agenda to boost the economy; as long as the economy strengthens, there is a chance to balance the budget, pay off the debt gradually, reduce unemployment, protect our national security, and continue to maintain our position in the world. Obama's plan is clear, a combination of reducing taxes for those with income below $250,000, reducing spending, and raising taxes for wealthy people. Romney and Rubio think that reducing taxes will result in economic growth and increase the government revenue due to tax payers. The reality check can't back up Rubio's, Rublicans's and Romney's stance, based on facts from the IRS. On average, the wealthiest people in America pay a lot more taxes than the middle class or poor people. The bottom 20 percent paid no taxes and the government had to pay to them, the next bracket from 21% to 40% ($16,961 to $33,870) paid only 2.8% of the total government income tax revenue, the next bracket from 41% to 60% ($33,871 to $59,154) paid only 9.9%, the next tax bracket from 61% to 80% ($59,155 to $103,428) paid a modest 18.7%, finally the top 20 percent of tax payers contributed a whopping 68 percent to the total revenues.
Assume that the US has approximately 236,882 millionaires and billionaires. Assume that their average gross income is 20 million US$, the highest tax rate for millionaires is 40% and at least they have to pay 30% of their adjusted gross income, then they will contribute the significant amount of $1.4 trillion for the government.
revenues. Ninety nine percent of Americans must salute and appreciate all millionaires and billionaires - they are good for the country.

[LEAVA12]

Second, it is true that 'Increasing the income tax rate on millionaires would hurt the economy because they are job creators' ?
The fact is that millionaires froze billions of dollars in banks from 2008 to now, but the economy has recovered gradually and the rate of national unemployment has been reduced significantly from 12.5% on Dec, 2008 to 8.2% today.

Third, there is a strong possibility that the rate of unemployment could be as low as 7% had the Obama administration not been faced with at least five factors to impede Obama's economic agenda: It took almost three years to stop the free falling of the severe economic recession in 2008, the economic and political ideology of Congress, the economic turmoil in Europe - the largest economic domain in the world- economic competition with the second economic power, China, and the limitations of presidential economic budget power due to Article I, section 9, clause 7 of The Constitution of the United States and Article I, section 5, clause 2: Congress is the authority to determine the rules governing its procedures.

[LEAVA12]

First, the basis of our tax system is Progressive Tax Theory; the more one earns, the higher their tax bracket is. The basic concept of Laffer Curve Theory is if the tax bracket is too high or too low, then government revenue will be two low . Therefore the optimum tax bracket is simply the maximum of the Laffer curve. Unfortunately the Laffer Curve cannot define the optimum point. Indeed the Laffer Curve is a very poor and undefined mathematical model - it would never stand up to serious mathematical analysis. Therefore it is very controversial. For instance, people have come up with many different curves, and many different optimal points.
Actually Reagan, Bushes and current Republican Congressmen have used this theory to try to boost the economy when they thought that the optimum tax rate is about 30% or 35%. In fact, the Laffer Curve may have the optimum point at 50% if the Laffer curve is a parabola. President Dwight Eisenhower's highest tax rate is 91% and the economy did not stop growing. From 1954 to 1963, the top tax rate is 91%, then it was reduced from 77% to 70% from 1964 to 1980. President Reagan reduced it further from 50% in 1982 to the lowest tax rate of 28%.
Today the US has the lowest top tax rate -35%- compared with many developed countries where the top tax rate varies from 40% to Denmark's 62.28%. Perhaps the top rate of the world is France's 75%, which Hollande proposed the following during his campaign. History of the national debt may prove that the optimum tax bracket is higher than 50%. Consequently, President Ronald Reagan (1981-1989) inherited roughly 908 billion US$ in debt and took it up to 2.6 trillion US$ after 8 years; an increase of 186%. President Bill Clinton (1993-2001): Took Bush's 4.2 trillion US$ up to 5.7 trillion US$, a 36% increase. President George W. Bush (2001-2009) inherited Clinton's 5.7 trillion US$ and ended with 10.6 trillion US$, an 86% increase. Recently, President Barack Obama (2009-2012): So far, has taken Bush's 10.6 trillion US$ up to 16.2 trillion US$ at the end of 2012 (as projected) an increase of 53%.

[LEAVA12]

President Obama wants to extend current, lower rates for 98 percent of Americans — individuals earning $200,000 a year or less and families making $250,000 or less (this encompasses the middle class and the poor), but increasing the tax rate on incomes above $ 250,000. On the other hand, the Republicans and Mr. Romney want to extend tax cuts for everybody - including millionaires. Perhaps they even want to decrease the tax rate for millionaires.

Which idea is feasible in terms of boosting the economy, balancing the budget and reducing the national debt?

[LEAVA12]

Based on Romney's tax cut plan for millionaires, a billionaire with annual income of $1 billion may save $150 million per year with the assumption he or she only pays a 20% tax rate after many loophole deductions. It sounds good to billionaires and therefore it could be a catalyst for the wealthy to financially support the Romney campaign.

[hillzhavays]

seabass, your voice of reason falls on occupy's frothingly deaf ears. Do not present him with valid points or verifiable facts. It is a waste of time.

[occupy_cbs]

You fox/rush parrot have been outed, and your posts are shameful! LOL!