Obama Against Tax Break for High-Income Workers
Responding to an opinion piece by former director of the Office of Management and Budget Peter Orszag, President Obama plans to say during a speech in Cleveland that he opposes keeping the Bush tax cuts for individuals making more than $200,000 a year or households making more than $250,000 — about two percent of tax filers. The New York Times reports:
Mr. Obama’s opposition to allowing the high-end tax cuts to remain in place for even another year or two would be the signal many Congressional Democrats have been awaiting as they prepare for a showdown with Republicans on the issue and ends speculation that the White House might be open to an extension. Democrats say only the president can rally wavering lawmakers who, amid the party’s weakened poll numbers, feel increasingly vulnerable to Republican attacks if they let the top rates lapse at the end of this year as scheduled.
It is not clear that Mr. Obama can prevail given his own diminished popularity, the tepid economic recovery and the divisions within his party. But by proposing to extend the rates for the 98 percent of households with income below $250,000 for couples and $200,000 for individuals — and insisting that federal income tax rates in 2011 go back to their pre-2001 levels for income above those cutoffs — he intends to cast the issue as a choice between supporting the middle class or giving breaks to the wealthy.
Of course, this is not Obama’s decision — Congress will start the arduous process of hashing out an agreement on the expiring tax breaks when they return from August recess next week.