Obama calls for temporary extension of some Bush tax cuts

Updated

President Obama urged Congress to extend the Bush tax cuts for Americans making under $250,000 a year in a White House speech to the press on Monday. At the same time, he presented his case for allowing the Bush tax cuts for the top 2% of earners to expire.

“Let’s agree to do what we agree on. That’s what compromise is all about.” he said, pointing out that both Democrats and Republicans favor renewing tax cuts that would effect all but the wealthiest Americans. “Let’s not hold our economy and the vast majority of Americans hostage while we debate extending tax cuts for the wealthy. We can have that debate, but let’s not hold up working on the thing that we already agree on.”

Obama argued that keeping taxes low for the 98% of Americans who make under $250,000 would help grow the economy, while allowing taxes on the top 2% to go up would help pay down the federal deficit.

“Everyone agrees we need to do something about these deficits and these debts,” he said. But while he highlighted points of agreement on tax cuts and the deficit, he also attempted to frame the argument over tax cuts for the wealthy as a philosophical debate about the roots of American prosperity.

“One side believes prosperity comes from the top down,” he said, presumably referring to the Republicans and Mitt Romney. He then contrasted this against his own view, that “prosperity has always come from an economy that’s built on a strong and growing middle class.”

Alluding to Friday’s dismal jobs report, Romney campaign spokesperson Andrea Saul replied, “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.”

A statement from the office of Senate Minority Leader Mitch McConnell (R-KY) echoed the “small businesses” talking point, saying, ”It’s not an accident that the President didn’t explain how his plan to raise taxes on small businesses will create jobs—he can’t say that with a straight face, it simply isn’t true.”

Obama preempted these criticisms in his speech, saying that his proposal “would extend taxes for 97% of all small businesses.”

According to the Center on Budget and Policy Priorities, letting tax cuts for the top 2% of earners expire would save $829 billion over the next decade. But as Dylan Matthews of Wonkblog points out, the top marginal tax rate for high-income earners would still be extremely low by historical standards.

Notably, and as David Weigel mentioned on Twitter, the District of Columbia has a greater percentage of people who would see their taxes go up under the Obama plan than any state.

Mitt Romney and Barack Obama

Obama calls for temporary extension of some Bush tax cuts

Updated