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(Credit: AP) (CBS News) Congressional Republicans say President Obama's call for eliminating the Bush-era tax cuts for American families making $250,000 or more is old news - and that he is simply trying to change the subject from three months worth of disappointing jobs reports."Today's proposal is clearly based on a political calculus, not an economic one," asserted Senate Minority Leader Mitch McConnell, R-Ky., in a written statement. "No one should see an income tax hike next year--not families, not small businesses and other job creators."
In Monday's address from the East Room at the White House, the President argued Congress should provide middle class families with more economic certainty by locking in their tax rates for next year now, rather than waiting until the end of the year when the reduced rates first passed by President George W. Bush in 2001 are set to expire.
However, he said, it is time for the top 2% of American earners to pay more. "I just believe that anybody making over $250,000 a year should go back to the income tax rates we were paying under (President) Bill Clinton -- back when our economy created nearly 23 million new jobs, the biggest budget surplus in history, and plenty of millionaires to boot," he said.
Republicans accused the president of trying to inflict a tax hike on small businesses that are already struggling in a sluggish economy. "President Obama's push to raise taxes on those earning more than $250,000 - including 940,000 business owners - could not come at a worse time," argued Senate Minority Whip Jon Kyl, R-Ariz.
Mr. Obama pointed out that 97 percent of small businesses would not be affected if the Bush-era tax cuts lapsed for those making more than $250,000 a year. "I'm not proposing anything radical here," he argued.
Congressional Democrats have been pushing for the same $250,000 dividing line for years, but in recent months they have retreated to a new position they hoped would get more traction with Republicans: an income cutoff of $1 million. "The $250,000 never made it," House Minority Leader Nancy Pelosi admitted in a press conference in May. "If we can get the million dollar and above people to pay their fair share, we get a lot of money... eighty one percent of the benefits of the Bush tax cuts go to the people making over a million dollars a year."
Republicans argued today's announcement puts Mr. Obama out of step with Democrats in Congress, some of whom have argued that no taxes should be raised when the economy is so fragile.
But Senate Majority Leader Harry Reid, D-Nev., signaled his support, saying he would discuss "next steps" with Democrats in coming days.
"I agree with President Obama that we should extend tax cuts for all American families up to the first $250,000 of income immediately," he said in a statement, adding "Republicans should stop holding these middle-class tax cuts hostage to extract more reckless giveaways for millionaires and billionaires."
Despite their insistence on creating certainty for taxpayers, both sides have stopped advocating that the tax cuts be made permanent or even long term. House Republican leaders have scheduled a vote later this month on renewing the current income tax rates for all earners for just one year, to give Congress time to focus on overhauling and simplifying the entire tax code.
Source: http://feeds.cbsnews.com/~r/CBSNewsHorserace/~3/UKTplmmGg4A/
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