President Barack Obama will not budge on his mandate to allow taxes for the wealthy to rise, while extending tax cuts for the middle class and poor.
“… if we’re serious about reducing our deficit while still investing in things like education and research that are important to growing our economy … then we’re also going to have to ask the wealthiest Americans to pay higher tax rates. That’s one principle I won’t compromise on.”
The plan to raise taxes on the wealthiest Americans is a point the president made throughout his re-election campaign. Despite him winning the election, as well as the impending fiscal cliff, Congress has been unable to come to an agreement about how to solve the problem, notes The Los Angeles Times.
Part of the fiscal cliff, according to analysts, is the expiration of the temporary tax cuts passed under former President George W. Bush. They are set to expire at the end of this year, allowing the tax rate to go up for all Americans. In order to avoid this, Democrats want to keep taxes low for the poor and middle class, while raising them for the wealthy.
Should Congress not be able to come to an agreement, then the average tax rate for the typical family of four will go up by about $2,200. Obama stated, “That would be bad for families, it would be bad for businesses, and it would drag down our entire economy.”
Vice President Joe Biden stated that the White House is willing to negotiate how high the tax rate would go up for the wealthy, but he also reiterated that the tax rate must go up in order to avoid the fiscal cliff. House Majority Leader John Boehner (R-OH) appeared to express a willingness to work with the White House on taxes on Friday, but his office later stated that the congressman’s opposition to higher tax rates “has not changed.”
Do you think that Congress will come to an agreement in time to save the country from going over the fiscal cliff, or should we prepare for higher tax rates next year?