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Obama To Avoid Tax Cut 'Brinkmanship'

by Leroy Baker, Tax-News.com, New York

05 November 2010


US President Barack Obama has said that negotiating with the Republican leadership in Congress to ensure that tax cuts for the middle class are extended by the start of next year will be one of his "top priorities" in the weeks ahead.

The President remains convinced that the temporary George W. Bush era tax cuts should not be extended for those with annual incomes of more than USD200,000 per year (and USD250,000 per year for joint filers), but Republicans are insisting that all of the tax cuts due to expire at the end of this year should be renewed regardless of income levels.

While the Democrats will control both arms of Congress in the 'lame duck' session before the new Congress begins in January, the Republican victory in the midterm elections strengthens their hand and Obama said in a White House press conference that he hopes to avoid a game of "brinkmanship" with Republicans on the issue.

“My goal is to make sure that we don’t have a huge spike in taxes for middle-class families,” Obama said. “My hope is, is that given we all have an interest in growing the economy and encouraging job growth, that we’re not going to play brinkmanship but instead we’re going to act responsibly."

However, comments from key players in Congress in the wake of the elections suggest that the upcoming battle could indeed be messy, with both sides entrenched in their respective points of view.

Rep. John Boehner, who is set to become House Majority Leader in the new Congress, said on Wednesday that extending tax cuts for all taxpayers "is the right policy for our economy."

Meanwhile, Senate Majority Leader Harry Reid told reporters that extending all of the Bush-era tax cuts will be "a road to a USD4 trillion debt."

"That won't happen," he said.

TAGS: tax | fiscal policy | law | United States | individual income tax

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