The United States President-elect may delay his plans to increase taxes on wealthy individuals and families while Congress works on the more pressing issue of putting together a package of economic stimulus measures which, could be signed by the new president during his first days in office.
The temporary tax cuts passed under the Bush administration are due to expire at the end of 2010, but Obama has proposed that tax cuts benefiting those with incomes of USD250,000 per year or more will be repealed before they have a chance to expire. However, Obama's plans have been complicated by the deteriorating economic outlook, and one of his senior aides revealed on Sunday that an immediate repeal of the tax cuts was no longer a priority.
Obama's tax plan pledged to increase the top rate of income tax to 36.9% from its current level of 35%, which has been in force since Bush's first round of temporary tax cuts in 2001. Obama also proposed to restore capital gains tax to its pre-2001 level for those on high incomes.
Meanwhile, Congress has turned its attention to building some form of stimulus package. This is expected to be worth anywhere from USD100bn to USD300bn, and will probably contain some form of tax cut targeted towards low- and middle-income workers and small businesses.
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