Related News
Obama announces tax deal with Republicans
Source: Agencies |
December 7, 2010, Tuesday
|
Online Edition
Online Edition
US President Barack Obama announced a compromise deal yesterday to extend all Bush-era tax cuts for two years, giving ground to emboldened Republicans who won big in last month's US congressional elections.
After meeting Democratic leaders, Obama announced a "framework" agreement with Republicans that would renew tax cuts not just for the middle class -- as he and fellow Democrats had sought -- but also for wealthier Americans, as Republicans wanted.
The tentative plan is expected to draw resistance from some liberal Democrats, who have expressed disappointment that the president was bending to Republican demands while not gaining enough in return. Obama might need Republican help to pass the package if enough of his fellow Democrats revolt.
The tentative tax deal, expected to extend breaks on dividends and capital gains as well, also calls for a 2 percent employee payroll tax cut and a 13-month extension of unemployment benefits, which could placate some Democrats.
But Obama conceded to Republican demands on the estate tax, by proposing a 35 percent tax with a US$5 million individual exemption level, which he admitted was more generous than he felt was "wise or warranted."
"We cannot play politics at a time when the American people are looking for us to solve problems," Obama told reporters. "I am confident ultimately that Congress is going to do the right thing."
Obama said he made concessions because of the urgent need to reach a deal before Congress adjourns this month to avoid having the middle class face higher taxes when all of the Bush-era cuts expire on December 31.
"I have no doubt that everyone will find something in this compromise that they don't like," Obama said. "In fact, there are things in here that I don't like -- namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates. But these tax cuts will expire in two years."
Extending all the tax cuts for two years would cost US$501 billion, according to the congressional budget office, at a time when Obama is under pressure to cut the US$1.3 trillion budget deficit. The CBO also says renewing the rates will boost the economy in the short term but be harmful in the long term.
The tax bill is likely to meet some resistance from Democrats in Congress, but analysts reckon it faces a good chance of ultimately being approved.
Most Democrats want to extend the lower tax rates for individual income up to US$200,000 only, while Republicans have pushed for also keeping the tax cuts for people who earn far higher incomes.
Representative Peter Welch, a Vermont Democrat, called Obama's proposal "fiscally irresponsible" and "grossly unfair."
"We support extending tax cuts in full to 98 percent of American taxpayers, as the president initially proposed. He should not back down. Nor should we," Welch said in a letter to Democratic House Speaker Nancy Pelosi.
Liberal supporters accuse Obama of being too willing to compromise in the tax battle in a bid to find common ground with Republicans, who have been emboldened by big gains in the November 2 congressional elections.
New York Times columnist Paul Krugman argued that Obama should simply let taxes rise for all Americans rather than agreeing to allowing the tax cuts to continue for the wealthy.
Obama insisted that unemployment insurance be extended for those out of work as part of any tax deal.
Unemployment payments, which had already been extended by Congress for to up to 99 weeks from a traditional 26 weeks, expire this month for two million Americans whose benefits have run out.
After meeting Democratic leaders, Obama announced a "framework" agreement with Republicans that would renew tax cuts not just for the middle class -- as he and fellow Democrats had sought -- but also for wealthier Americans, as Republicans wanted.
The tentative plan is expected to draw resistance from some liberal Democrats, who have expressed disappointment that the president was bending to Republican demands while not gaining enough in return. Obama might need Republican help to pass the package if enough of his fellow Democrats revolt.
The tentative tax deal, expected to extend breaks on dividends and capital gains as well, also calls for a 2 percent employee payroll tax cut and a 13-month extension of unemployment benefits, which could placate some Democrats.
But Obama conceded to Republican demands on the estate tax, by proposing a 35 percent tax with a US$5 million individual exemption level, which he admitted was more generous than he felt was "wise or warranted."
"We cannot play politics at a time when the American people are looking for us to solve problems," Obama told reporters. "I am confident ultimately that Congress is going to do the right thing."
Obama said he made concessions because of the urgent need to reach a deal before Congress adjourns this month to avoid having the middle class face higher taxes when all of the Bush-era cuts expire on December 31.
"I have no doubt that everyone will find something in this compromise that they don't like," Obama said. "In fact, there are things in here that I don't like -- namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates. But these tax cuts will expire in two years."
Extending all the tax cuts for two years would cost US$501 billion, according to the congressional budget office, at a time when Obama is under pressure to cut the US$1.3 trillion budget deficit. The CBO also says renewing the rates will boost the economy in the short term but be harmful in the long term.
The tax bill is likely to meet some resistance from Democrats in Congress, but analysts reckon it faces a good chance of ultimately being approved.
Most Democrats want to extend the lower tax rates for individual income up to US$200,000 only, while Republicans have pushed for also keeping the tax cuts for people who earn far higher incomes.
Representative Peter Welch, a Vermont Democrat, called Obama's proposal "fiscally irresponsible" and "grossly unfair."
"We support extending tax cuts in full to 98 percent of American taxpayers, as the president initially proposed. He should not back down. Nor should we," Welch said in a letter to Democratic House Speaker Nancy Pelosi.
Liberal supporters accuse Obama of being too willing to compromise in the tax battle in a bid to find common ground with Republicans, who have been emboldened by big gains in the November 2 congressional elections.
New York Times columnist Paul Krugman argued that Obama should simply let taxes rise for all Americans rather than agreeing to allowing the tax cuts to continue for the wealthy.
Obama insisted that unemployment insurance be extended for those out of work as part of any tax deal.
Unemployment payments, which had already been extended by Congress for to up to 99 weeks from a traditional 26 weeks, expire this month for two million Americans whose benefits have run out.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
