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Obama opposes permanent tax break for wealthy: aide
President Barack Obama listens to remarks by Russia's President Dmitry Medvedev during their meeting at the APEC Summit in Yokohama, November 14, 2010.
Credit: Reuters/Jim Young
By Richard Cowan
WASHINGTON | Sun Nov 14, 2010 12:41pm EST
(Reuters) - President Barack Obama will not go along with a permanent extension of tax cuts for the wealthiest, presidential adviser David Axelrod said on Sunday, without closing the door to a temporary continuation.
"There's no bend on the permanent extension of tax cuts" for the wealthiest, a Republican proposal that Obama has long opposed, Axelrod said on NBC's "Meet the Press."
He did not respond directly when asked whether Obama would agree to tax legislation that couples a temporary extension for top earners with making permanent the current breaks for the middle-class.
"We are looking forward to sitting down with (congressional) leaders," Axelrod said. Obama has invited a bipartisan group of congressional leaders to dinner at the White House this week.
The U.S. Congress is set to begin a post-election legislative session on Monday, with tax policy seen as one of the highest priorities for Obama and lawmakers.
Without congressional action, a raft of tax cuts introduced by former President George W. Bush will expire on December 31. The Republicans want to extend the cuts for wealthier Americans as well as the middle class.
Outspoken conservative Senate Republican Jim DeMint on Sunday sounded a conciliatory note in the divisive tax debate.
Asked during an interview on "Fox News Sunday" if he could vote for a two- or three-year extension of all of the tax cuts, instead of making the breaks permanent, DeMint said: "If that's all we could get out of the president, then he is the president, so we'll work with him on that."
Obama's Democrats, who suffered huge losses in the November 2 midterm elections, and Republicans, who take control of the House of Representatives in January, agree that all tax cuts for individuals earning up to $200,000 a year and families earning up to $250,000 should be continued.
The fight has been over whether those tax breaks should continue on income beyond the $200,000/$250,000 thresholds.
LOST REVENUES
According to Treasury Department estimates, it would cost the government about $3 trillion in lost revenues over 10 years if tax cuts are continued only for low-income and middle-income people. Including the upper tiers would add an additional $700 billion in costs, the administration estimates.
Obama has argued that with huge annual budget deficits, the United States cannot continue to give big income tax breaks to the wealthy. Republicans counter that with an unemployment rate continuing over 9 percent, increasing any taxes could stifle the economy. Now that the congressional elections are over, both parties are showing signs of compromise.
Democratic Senator Charles Schumer, a member of the tax-writing Senate Finance Committee, suggested a third approach in the tax debate:
"Everyone below a million dollars (annual income) would get a tax cut, but the millionaires and the billionaires won't," Schumer said on CBS's "Face the Nation."
http://www.reuters.com/article/idUSTRE6AD20Z20101114
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