Obama calls for Bush tax-cut extension

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Courtesy of Newsmax.com

President Barack Obama urged Congress to pass a one-year extension of Bush-era tax cuts for families making less than $250,000 a year, while allowing rates to rise for higher earners, as he seeks to sharpen differences with congressional Republicans and their presidential candidate, Mitt Romney.

The country is being held back by a partisan stalemate in Washington, and “nowhere is that stalemate more pronounced than on the issue of taxes,” Obama said in remarks today at the White House. “It’s time to let the tax cuts for the wealthiest Americans — folks like myself — to expire.”

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Barack Obama

Obama is putting his focus on the issue of tax fairness three days after a government jobs report showed the nation’s unemployment rate stuck at 8.2 percent. Obama said tax cuts for the wealthy haven’t helped the economy. House Republicans have sought one-year extensions of all the tax cuts. Obama previously called for making the middle-class cuts permanent.

Romney campaign spokeswoman Andrea Saul said in a statement before the president’s remarks that Obama’s approach would amount to “a massive tax increase” for “families, job creators, and small businesses.”

“It just proves again that the president doesn’t have a clue how to get America working again and help the middle class,” Saul said. She said Romney wants to lower marginal tax rates and “understands that the last thing we need to do in this economy is raise taxes on anyone.”

The president’s remarks kick off a week during which he will visit the swing states of Iowa and Virginia and his campaign will hold events in New Hampshire, Nevada, Colorado and Florida intended to show Obama as focused on middle-class taxpayers and Romney as attuned to the wealthiest Americans.

Congress is returning from an Independence Day recess today. Lawmakers of both parties are discussing whether to postpone $1.2 trillion in spending cuts over a decade that are set to begin in January, though they may not advance legislation until after the November election.

Later this month, the House plans to vote to extend the expiring tax cuts for all income levels for a year and set in motion a process that would lead to a more comprehensive overhaul of the tax code in 2013. That bill isn’t expected to advance in the Senate, which is controlled by Democrats.

If Congress doesn’t act, the top tax rate for ordinary income will increase to 39.6 percent from 35 percent. The top tax rate on capital gains will increase to 23.8 percent from 15 percent, and dividends would be taxed as ordinary income.

Obama said the U.S. economy shouldn’t be held “hostage” to the debate over taxes. He said the tax cuts for middle-income Americans should be extended now and the debate over whether taxes for top earners should be cut will be decided by the presidential election in November.

“My opponent will fight to keep them in place,” Obama said. “I will fight to end them.”

By drawing the line for tax increases at $250,000 adjusted gross income for married couples and $200,000 for individuals, Obama sets up potential contrasts with two factions of senators in his party.

Some Senate Democrats, including Ben Nelson of Nebraska, have expressed openness to negotiating with Republicans on extensions of tax rates for all income levels.

Others, including Charles Schumer of New York, say the line at which tax increases start should be set at $1 million. That approach would bring in much less revenue and be more politically defensible, particularly in high-income states such as New York and New Jersey where a greater percentage of taxpayers would be affected by Obama’s threshold.

In December 2010, Obama and congressional Republicans agreed to extend the 2001 and 2003 tax cuts for two years, letting them expire at the end of 2012. With job growth remaining stuck in June, Obama is looking for ways to convince voters that their economic situation will improve.

U.S. employers added 80,000 jobs last month, lower than economists’ forecasts and up only slightly from a 77,000 increase in May.

Obama’s tax push involves both his official and campaign advisers. Robert Gibbs, former White House press secretary and now a campaign adviser, appeared on morning news shows to promote Obama’s message on taxes while highlighting the campaign’s portrayal of Romney.

Romney thinks “we should shower rich people with tax breaks” Gibbs said on NBC’s “Today” show. “Those are the two different contrasting visions in this campaign.”

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