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Thursday 28 August 2014

Obama stays tough on taxing rich

Published 07/12/2012 | 03:39

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Barack Obama has called for government spending cuts but by less than the Republicans want (AP/Carolyn Kaster)

President Barack Obama and Republicans have crept closer to talks on avoiding a recession-threatening package of automatic tax increases and spending cuts, but the White House insisted it would not budge on higher taxes on the wealthy.

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To drive home the point, Mr Obama pressed his hard line on tax increases for the rich from the basement of a family's home in suburban northern Virginia, declaring they would suffer economically if Washington did not extend tax cuts for the 98% of American families earning less than 250,000 dollars (£156,200) a year.

"We're in the midst of the Christmas season," the President said. "I think the American people are counting on this getting solved. The closer it gets to the brink, the more stress there is going to be."

Mr Obama and politicians have until the end of the year to avert across-the-board spending cuts and across-the-board tax increases.

The President reiterated the firm stance he has taken in recent days, warning that he was willing to let that economy-rattling double whammy take effect if Republicans did not drop their opposition to higher tax rates for the wealthy. "Just to be clear, I'm not going to sign any package that somehow prevents the top rate from going up for the folks in the top 2%," Mr Obama said. "But I do remain optimistic that we can get something done that is good for families like this one and is good for the American economy."

The President's quick trip to the Santana family's home - a 15-minute drive from the White House - is part of his effort to rally public support for his tax proposals. The family he visited was one of several hundred thousand who shared a story online, at the White House's urging.

With a new AP-GFK poll showing clear support for Mr Obama's position and dwindling backing for cutting government services to curb the climbing US budget deficit, the President and House of Representatives speaker John Boehner spoke by telephone on Wednesday for the first time in days about a way to avoid the so-called fiscal cliff which would occur on January 1.

The phone contact initiated by Mr Obama and disclosed by a Boehner spokesman, raised the possibility that negotiations could soon resume on heading off what some economists warn could be a serious blow to an economy still recovering from the Great Recession.

So far Republican leaders have said they would only agree to higher tax revenues by closing loopholes or reducing tax breaks, not by raising rates. The opposition has struggled, however, to remain united and find its footing in talks with a president emboldened by his November election victory and unified congressional Democrats.

While insisting that tax rates go up on the top 2% of American earners, Mr Obama too, has called for government spending cuts but by less than the Republicans want.

Press Association

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