Obama Now “Open” To Extending Bush Tax Cuts For All Taxpayers
This is, perhaps, the first sign that the Obama Administration is recognizing the new political realities after Tuesday:
President Obama is now open to extending the Bush-era tax cuts at all income levels, the White House said Thursday, a notable change in tax policy from the administration.
However White House Press Secretary Robert Gibbs said the administration is still against a permanent extension of all the Bush-era tax cuts, especially to the wealthiest Americans.
Before the midterm elections, the extension of all Bush-era tax cuts–especially for individuals making over $250,000 a year -was the threshold the White House and Democrats were unwilling to cross. The White House said repeatedly before the election that it was open to extending some of the tax cuts, mostly for those in the middle class.
However in recent days, there has been increasing rhetoric on both sides of the aisle that a temporary extension of all tax cuts were now on the table. If the White House pushes for a permanent extension of all tax cuts, it would be one of the first “olive branches” that President Obama has offered to the Republicans since Tuesday’s landslide win for the GOP.
“Obviously, the president [believes] making those tax cuts for the upper end permanent is something that the president does not believe is a good idea,” Gibbs said. “But this is something that I presume will take up big chunk of the lame duck congressional session and … as the president said yesterday, he’s certainly willing to listen to both sides.”
There is, obviously, an advantage for the Obama Administration in having the tax cut issue dealt with in the lame duck session since the Democrats still control both chambers until the 112th Congress is sworn in on January 3rd. Doing it now gives them more control over the legislative process.
My guess is that we’ll see an extension of the Bush tax cuts for all taxpayers, but that the cuts for taxpayers earning above $ 250,000 a year will be limited in time and/or offset by eliminating certain tax credits.