Obama wants middle class tax cut
11 July 2012
Posted by: SAIT Technical
By Julie Pace and Steven Peoples (AP/News 24)
Washington - President Barack Obama told Americans on Monday he wants Congress to extend tax cuts for the country's middle class while letting them rise on high income earners.
As he attempts to turn voters' attention from the stagnant unemployment numbers - now standing at 8.2% - and limp economic recovery, Obama spoke at the White House as he made an opening campaign pitch for continuing middle class tax relief.
He also said continuing tax cuts for high-income earners was a major driver of the sky-rocketing US federal budget deficit.
But extending the tax cuts for the middle class, the president said, would help the 98% of the American people who don't make more than $250 000. Absence of the extension, he said, "would be an incredible drag on the economy”.
The White House is again raising the tax issue with full knowledge that the Republican-controlled House of Representatives will not accept such a move unless it also includes extending tax cuts for high income earners.
That is a symptom of the legislative and political gridlock consuming Washington in advance of the November elections. Another example is the plan in the House to vote to remove Obama's health care overhaul from the books. That will be blocked by the Democratic-controlled Senate and would be vetoed by Obama even should it pass both houses in Congress.
A one-year across-the-board tax cut - that would extend the lower rates instituted under former President George W Bush - expires at the end of the year.
The White House official said Obama will call for yet another one-year extension of tax cuts but only for people making less than $250 000 a year.
The Romney campaign responded quickly.
Romney in the lead
"President Obama's announcement this morning will mean a tax increase for millions of families, job creators, and small businesses,” Romney spokesperson Andrea Saul said in a statement.
An official at Obama's re-election campaign says it will promote the president's economic agenda in a series of events this week in battleground states, including New Hampshire, Colorado and Nevada. The officials spoke on condition of anonymity in order to preview Obama's announcement.
Meanwhile, Obama's campaign and the Democratic party raised $71m in June, well below the $106m hauled in by Romney and the Republican party during the same period. It was the second straight month that Romney has raised more money than Obama.
Obama officials have warned the fundraising deficit could harm the president's chances of winning re-election.
On Sunday, Romney privately raised millions of dollars from New York's elite, while Democrats were launching co-ordinated attacks against the presumptive Republican presidential contender, intensifying calls for him to explain his offshore bank accounts and release several years of tax returns.
The line of attack, dismissed by the Romney campaign as an "unfounded character assault,” follows new reports that raise questions about Romney's personal wealth, which could exceed $250m.
Obama's re-election campaign is expected to push the strategy throughout the coming week, underscoring their desire to portray Romney as disconnected from the middle-class voters he needs to win the presidency.
"He's the first and only candidate for the president of the United States with a Swiss bank account, with tax shelters, with tax avoidance schemes that involve so many foreign countries,” Senator Dick Durbin, an Illinois Democrat, said on CBS television on Sunday.
He was one of several high-profile Democrats who spoke out on the Sunday morning TV news shows.
Romney may have unintentionally played into the Obama theme.
Republican donors driving Mercedes, Bentleys - and in one case a red 2013 Ferrari Spider - crowded into a series of closed-door Romney fund raisers in the Hamptons, New York's exclusive string of waterfront communities on Long Island's South Shore.
Wall Street bankers and brokerage house chiefs, among others, make the area their weekend playground. Romney's Hamptons swing follows a week long family vacation at his lakeside vacation home in New Hampshire.
Voters are split on whether they trust Romney or Obama more to run the US economy, but a majority says that Obama better understands their concerns. The Hamptons crowd, however, saw things differently.
Romney's day concluded at the Southampton estate of billionaire industrialist David Koch, where donors were asked to give $50 000 per person or $75 000 per couple.
The event attracted protesters like Robert Shainwald, a 65-year-old retired teacher.
"Romney has no idea what the working person's daily concerns are. How could he?” Shainwald said as he waved a sign offering free vegetables to anyone who wasn't a billionaire.
Romney would be among the nation's richest presidents if elected. He made his fortune at Bain Capital, a Boston-based private equity firm that has become a key point of contention in his White House bid. He hasn't drawn a regular pay check in more than a decade, however, and has instead lived off a series of investments.
Release tax returns
Romney has refused to release more than two years of tax returns that would outline those investments, breaking from a precedent set by his father, former Michigan Governor George Romney, who released 12 years of his tax returns when he sought the presidency a generation ago.
And an Associated Press report recently raised questions about a previously undisclosed Bermuda-based company included in Romney's portfolio until the day before he became Massachusetts governor in 2003.
Senior Obama campaign official Robert Gibbs said Romney could easily clear up questions about his personal finances if he simply released "a series of years” of returns.
"Mitt Romney's father was the pioneer for releasing a series of tax returns,” Gibbs said on CNN. "The best way to figure out if Mitt Romney is complying with American tax law is to have him release more of his tax returns.”
There is no indication Romney has not paid all the taxes he might owe.
Louisiana Gov Bobby Jindal, considered a possible vice presidential pick for Romney, struggled to defend the offshore financial activity on ABC television, dismissing the criticism as "a distraction from the Obama campaign”. And a Romney spokesperson suggested the new attack was inappropriate.
"The Obama campaign's latest unfounded character assault on Mitt Romney is unseemly and disgusting,” spokesperson Andrea Saul said.
The new push by Obama and his allies comes two days after the release of a lackluster jobs report that said the US unemployment rate was stuck at 8.2%. Romney has been largely focused on the economy throughout his campaign, an issue that voters overwhelmingly report will be on the top of their minds come Election Day in November.