Obama proposes middle class tax-cut extension

On Monday afternoon, President Barack Obama proposed a one-year extension of the Bush-era tax cuts for those making less than $250,000, with taxes restored to their previous levels on those making more.

“Our core mission as an administration and as a country has to be yes, putting people back to work ”“ but also rebuilding an economy where that work pays off,  an economy in which everybody can have the confidence that if you work hard, you can get ahead,” Obama 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 said if tax cuts expire for those making less than $250,000, on average families will pay the government $2,200 more in 2013, which he said would have a significant impact on the overall economy. He did not offer any estimates on the impact for those who would see higher taxes, but disagreed with critics who say a tax hike on the wealthy would stunt economic growth, citing the booming economy in the latter half of the 1990s on the eve of President George W. Bush taking office and instituting broad tax cuts in 2001.

“The folks who create most new jobs in America are America”™s small business owners,” Obama said. “The proposal I make today would extend these tax cuts for 97 percent of all small business owners in America. In other words, 97 percent of small businesses fall under the $250,000 threshold. So this isn”™t about taxing job creators, this is about helping job creators.”

Longer term, Obama said he is in favor of an overhaul of the entire tax code with an eye on simplification.