(The Root) — With the two-year extension of the Bush-era tax cuts scheduled to expire at the end of this year, like clockwork the partisan debate over extending them again is upon us.
The last time President Obama dealt with this issue, back in late 2010, he agreed to extend the tax cuts for all income groups as part of a deal with Republican lawmakers that also extended his payroll-tax cut and unemployment insurance. Since then, however, the president has vowed never again to renew the Bush tax cuts for the wealthy — despite House Republican plans to vote later this month on extending them for everyone.
On Monday the president urged Congress to extend the tax cuts for people making less than $250,000 a year. As for those making more than $250,000, he said that the two sides can keep having that debate but in the meantime should move on the part they agree on.
“Most people agree that we should not raise taxes on middle-class families or small businesses — not when so many folks are just trying to get by; not when so many folks are still digging themselves out of this Great Recession that we had,” Obama said on Monday of his call to extend for another year tax cuts for the 98 percent of Americans who make less than $250,000. “Let’s agree to do what we agree on. That’s what compromise is all about. Let’s not hold the vast majority of Americans and our entire economy hostage while we debate the merits of another tax cut for the wealthy.”
Did Cutting Taxes for the Wealthy Work?
In his remarks, President Obama anticipated the response from Republicans who argue that continuing to cut taxes for the wealthiest Americans will trickle down to the middle class by allowing them to create more jobs and unleash economic growth.
“I think they’re wrong,” he said. “I believe our prosperity has always come from an economy that’s built on a strong and growing middle class — one that can afford to buy the products that our businesses sell; a middle class that can own homes and send their kids to college and save enough to retire on.”
Obama also made the case that the Bush tax cuts, which have been in effect for 11 years now, have led not to the economic growth that Republicans envision but instead to a much weaker economy:
At the beginning of the last decade, Congress passed trillions of dollars in tax cuts that benefited the wealthiest Americans more than anybody else. And we were told that it would lead to more jobs and higher incomes for everybody, and that prosperity would start at the top but then trickle down.