The president says he will not extend the Bush tax cuts on yearly incomes above $250,000, setting up a fierce election-year debate over taxes
This week, President Obama drew a line in the sand on the Bush tax cuts, saying he will not extend decade-old rate cuts on annual income exceeding $250,000. (Without action from lawmakers, all of the Bush-era cuts will expire at year's end.) But while Obama vowed not to extend tax breaks for millionaires, he also called on Congress to extend the Bush-era tax rates for the 98 percent of Americans who earn less than $250,000 a year, though it's highly unlikely that he'll reach a deal with GOP lawmakers who want an across-the-board extension. Democrats say public opinion is on their side, with more than 60 percent of voters saying wealthier Americans do not pay enough taxes. Meanwhile, Republicans, including Mitt Romney, contend that raising taxes on anyone would hurt the feeble economy. Is Obama's move smart politics?
Yes. Obama has set a trap for Romney: Obama's tax gambit is forcing Romney "to oppose extending tax cuts for the middle class and defend tax cuts for affluent Americans," says Nate Cohn at The New Republic. In addition, Obama and his allies have "launched coordinated attacks on Romney's investments in foreign tax havens, a Swiss bank account, and unwillingness to release more than one year of tax returns," all of which is serving to paint Romney as a "self-interested plutocrat who prioritizes personal wealth over middle class job security." By highlighting the Bush tax cuts, the Obama campaign has created a "powerful synergy" in its assault on Romney's character and policies.
"Obama transitions to taxes"
Maybe. But it could also backfire on Obama: Most Americans support Obama's position, but "the politics of tax cuts are a lot trickier than they might first appear, especially in the midst of" a faltering economic recovery, says Reid J. Epstein at Politico. Several prominent Democrats prefer making the cutoff point $1 million instead of $250,000, which could isolate Obama from his own party. And remember, "Republicans won in a landslide in 2010 with a message of reeling in government spending and refusing any tax increases," which could work again come November.
"President Obama wields taxes as a wedge"
And it forces Obama to talk about the economy: The president's stance on the Bush tax cuts makes it easy for Romney to pivot to the lackluster economy, which is Obama's greatest weakness, says John Podhoretz at the New York Post. "The riposte from Mitt Romney and the Republicans is a clear one: At a time when the economy appears to be slowing, the president wants to raise taxes by $700 billion, and some part of that tax hike will hit small and medium-sized businesses just when the country needs them to be adding to their workforce." Ouch.
"A pathetic 'tax cut'"
Other stories from this topic:
- Opinion Brief: Is Obama the real 'outsourcer-in-chief'?
- Analysis: Will a lousy economy cost Obama the youth vote?
- The List: 6 signs Obama's immigration shift is already paying off