Obama Calls For One-Year Extension Of Bush-Era Tax Cuts For Those Making Less Than $250,000 Does He Not Realize This s Small Businesss
WASHINGTON -- President Barack Obama on Monday gave another push to Congress to extend the Bush-era tax cuts only for people making less than $250,000 a year, an idea that top Republicans were quick to shoot down.
"Pass a bill extending the tax cuts for the middle class, I will sign it tomorrow," Obama said during remarks at the White House. "Pass it next week, I'll sign it next week."
Flanked by about a dozen Americans who would benefit from the middle-class tax cut extension, Obama said the tax cuts for those making more than $250,000 are "a major contributor to our deficit," costing $1 trillion over the next decade. They are also the least likely to create economic growth, he said.
"We can't afford to keep that up, not right now," Obama said. "I just believe that anybody making over $250,000 should go back to the income tax rates we were paying under Bill Clinton."
All of the Bush tax cuts are set to expire at the end of the year in the absence of congressional action.
The president didn't make much news at his event; he's been pressing Congress to extend the middle-class cuts for months, and Monday's event seemed partially designed to draw attention away from the nation's sluggish job market. But Obama's call for a one-year extension of the middle-class cuts was more specific than requests he has made in the past. He also framed the issue of keeping tax cuts for the wealthy as a key difference between him and Mitt Romney.
"My opponent will fight to keep them in place. I will fight to end them," the president said.
Senate Majority Leader Harry Reid (D-Nev.) signaled that he's ready to move forward with legislation to do exactly what the president wants.
"I will be discussing the next steps in the Senate with my caucus in the coming days," Reid said in a statement after Obama's remarks. "Republicans have claimed they want to reduce our deficit; in the weeks ahead, they will have a chance to do so by joining Democrats to vote to extend tax cuts for all middle class American families on the first $250,000 of their income."
House Minority Leader Nancy Pelosi (D-Calif.), who previously broke with Obama by calling for extending the Bush-era tax cuts for people making up to $1 million, threw her support behind Obama's pitch and took a shot at Republicans for trying "to hold middle-class tax cuts hostage to tax breaks for the wealthiest."
But Republicans were dismissing the president's call before he even made his remarks. An aide to Senate Minority Leader Mitch McConnell (R-Ky.) sent out materials earlier Monday that included McConnell's recent comments about the need to extend all of the Bush tax cuts, including those for the wealthy.
"What we ought to be doing is extend the current tax rates for another year with a hard requirement to get through comprehensive tax reform one more time," McConnell said Sunday on CNN's "State of the Union."
House Majority Leader Eric Cantor (R-Va.) said the House will vote in the last week of July to extend the Bush-era tax cuts for everybody.
"Small businesses who are struggling to make payroll and working families who have tightened their belts to meet their budgets cannot afford to be hit with a massive tax increase come January," Cantor said in a statement.
For all the back and forth between Democrats and Republicans about whether it would hurt small businesses to only extend the middle-class tax cuts, ABC's Jon Karl notes that both parties have a point.
The bottom line is that just 2.5 percent of small businesses would be hit with a tax hike. But 2.5 percent translates to 894,000 businesses, which is a significant number.
Also, that $2500,00 income level is a bit bogus. What Obama said was that they would be taxed at the Bush level of 35% on the FIRST $250,000 earned and then at the increased level of 39.5% for income above that level. Thus, if they make $255,000 they would pay the increased tax on $5,000, NOT the entire amount. This is why he always says ABOVE or OVER $250,000. He means you get taxed at the higher rate on income ABOVE that mount, not AT that amount. Clever, isn't it?
The way he spins it makes it sound like good class warfare but he is still giving them a break. LOL
http://www.friendsoftheuscham...
Under Obama’s proposal, the highest income tax rates will go from 35 percent and 33 percent to 39.6 percent and 36 percent, respectively. This rate increase would negatively affect 1.2 MILLION — 28 percent — SMALL businesses filing under the INDIVIDUAL INCOME TAX CODE that make over $200,000.
Boehner has the answer: he was correct last fall when he said that only 2.5% of the OWNERS of small businesses would be affected.
. That's not what we're talking about. These are people who, who are carpet layers who maybe employ two or three other guys, or a plumber, maybe himself and his brother, and it's $250,000 in gross sales for their business. They're the ones that are looking at massive tax increases."
That's probably a compelling narrative for Bachmann -- big government taxes the little guys. We first fact-checked similar claims during the 2008 election, when Samuel Joseph Wurzelbacher, aka Joe the Plumber, worried he'd get a tax increase under Obama's plan if he bought a company that took in around $250,000 a year.
But how many small businesses actually fall into that category? Dante Chinni over at Patchwork Nation has a new analysis of the numbers:
There are about six million small businesses in the United States, says Al Lee, director of Quantitative Analysis at the firm Payscale, and half of them have four or fewer employees. In fact, three-quarters of those small business, he says, have fewer than 14 employees.
And is $250,000 a reasonable amount of money to expect those people to make? "In their dreams maybe," Lee says and he is in a good position to know. Payscale, researches and tracks employe...
. That's not what we're talking about. These are people who, who are carpet layers who maybe employ two or three other guys, or a plumber, maybe himself and his brother, and it's $250,000 in gross sales for their business. They're the ones that are looking at massive tax increases."
That's probably a compelling narrative for Bachmann -- big government taxes the little guys. We first fact-checked similar claims during the 2008 election, when Samuel Joseph Wurzelbacher, aka Joe the Plumber, worried he'd get a tax increase under Obama's plan if he bought a company that took in around $250,000 a year.
But how many small businesses actually fall into that category? Dante Chinni over at Patchwork Nation has a new analysis of the numbers:
There are about six million small businesses in the United States, says Al Lee, director of Quantitative Analysis at the firm Payscale, and half of them have four or fewer employees. In fact, three-quarters of those small business, he says, have fewer than 14 employees.
And is $250,000 a reasonable amount of money to expect those people to make? "In their dreams maybe," Lee says and he is in a good position to know. Payscale, researches and tracks employee compensation data and has the world's largest database of individual employee compensation profiles.
"About 10 percent said they made less than $25,000 and about 10 percent said they made more than $175,000," Lee says. "For a lot of small businesses it is a struggle to make anything – they have cash-flow issues."
But what about those wealthy small business owners out there? Are these people less likely to create jobs with a personal tax hike? Probably not, Lee says, because when business owners run firms that make that kind of money they are rarely running the business through their own bank account using their own income tax returns to pay that bill.
Also, that $250,000 income level is a bit bogus. What Obama said was that they would be taxed at the Bush level of 35% on the FIRST $250,000 earned and then at the increased level of 39.6% for income above that level. Thus, if they make $255,000 they would pay the increased tax on $5,000, NOT the entire amount. This is why he always says ABOVE or OVER $250,000. He means you get taxed at the higher rate on income ABOVE that mount, not AT that amount. Clever, isn't it?
The way he spins it makes it sound like good class warfare but he is still giving them a break. LOL
http://www.friendsoftheuscham...
Under Obama’s proposal, the highest income tax rates will go from 35 percent and 33 percent to 39.6 percent and 36 percent, respectively. This rate increase would negatively affect 1.2 MILLION — 28 percent — SMALL businesses filing under the INDIVIDUAL INCOME TAX CODE that make over $200,000.