Back in 2010, Obama did heed to Republican demands by extending the Bush-era tax cuts, citing economic reasons. He has, however, vowed not to do that again.
Currently Obama plans on only extending the Bush-era tax breaks for one year, and only for those making less than the threshold ($200,000 for individuals and $250,000 for families). When Congress comes back into session, Obama also plans on making a case against providing the tax cuts to those that are making more than the current threshold.
Chris Savage, writer and founder of electablog, told The Voice of Russia: “I think extending tax cuts for incomes under $250,000 is a sound choice given the current state of our economy. That money will, generally speaking, go right back into our economy because people that make less than $250,000 don't usually have a great deal of savings. It will also avoid hurting middle and lower class Americans at a time when they are already struggling.”
Many Americans share Mr. Savage’s opinion. According to a poll released by Princeton Survey Research Associates International, only 18% of the middle class would like the tax cuts kept in place, permanently for all income levels, while 28% would like the tax cuts to be extended for a year for the middle class.
“Extending the tax breaks for income over $250,000, however, is unconscionable. It’s clear that these budget-busting tax breaks are not creating jobs as the Republicans constantly tell us they will and wealthy folks are not likely to spend more than they already are because they are already spending a great deal compared with average Americans; their needs are already being met very nicely,” Chris Savage added.
While many Americans agree with Obama, some of his own party members do not see eye-to-eye with his plan. Nancy Pelosi, House Minority leader, proposed her own extension to the Bush tax cuts by raising the bar to those making under $1 million. “Democrats believe that tax cuts for those earning over a million dollars a year should expire and that we should use the resulting revenues to pay down the deficit.”
Republicans believe that what Obama is proposing is actually a tax hike for Americans. Chris Stirewalt, writer for Fox News, believes “they have been selling a tax hike on individual incomes above $200,000 for years as a way to make so-called millionaires and billionaires pay their fair share.”
By doing all this, Obama and his administration hope to frame Romney as a billionaire who is out-of-touch with the American people. They are also calling on Romney to release years of back tax forms to prove this point.
Chris Savage noted that “the fact that he won't release these records suggests that he's hiding something. We already know he's stashing income in offshore tax havens. The question is how much and why? All the currently available evidence suggests he's doing it to avoid paying taxes in the US and, if that’s true, it calls into question his loyalty to our country.”
If Obama can pull Romney into a fight over the middle class, he looks like he will come out the victor in the upcoming election. However, Republicans think they have an ace up their sleeve.
“Republicans will counter that Obama is calling for a small business tax and Romney will be able to say that his economic plan includes an across-the-board tax cut.” Chris Stirewalt wrote.
Because of Obama’s poor performance at creating jobs, Romney can go on the attack, claiming that the tax cuts do not go far enough and can even use those Democrats that oppose the small tax extension to help him prove his point.
Whatever the outcome may be, we will be sure to see the fight grow more and more intense over the next coming weeks as the election draws closer. Mitt Romney will be sure to bring up the job market sector, and Obama will likely bring up the tax problems that America is facing because of the small percentage of wealthy Americans.