After the political drubbing U.S. President Barack Obama and the Democrats took during last week’s midterm elections, Obama is determined not to cave in to the republicans. He steadfastly refuses to extend George Bush’s tax cuts for the wealthy which expire at the end of the year.
Obama denied statements made by his senior advisor David Axelrod to the Huffington Post. Axelrod suggested that the administration was ready to back a temporary extension of the current rates. Mr. Obama said Mr. Aelrod’s comments were “misinterpreted.”
“Here’s the right interpretation — I want to make sure that taxes don’t go up for middle class families starting on January 1st,” Obama said at a news conference at the conclusion of the G-20 Summit here. “That is my number one priority for those families and for our economy. I also believe that it would be fiscally irresponsible for us to permanently extend the high income tax cuts.” [link]
Economists argue that not extending the Bush tax cuts for the wealthy “would constitute a profound and damaging ‘anti-stimulus’ that would harm our prospects for expansion in the near future.” [link]
In a letter signed by more than 300 economists, The National Taxpayer Union argued that raising taxes on the wealthy would result in lost jobs and hiring freezes. “The promise of a tax increase in January 2011 would create significant economic distortions as individuals and businesses conserve capital or stave off hiring,” the letter reads.
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But Obama’s most unexpected allies may be the millionaires and billionaires who benefitted from Bush’s tax cuts.
“This is a time when the wealthiest Americans need to give back to the country,” said millionaire Jeffrey Hollender of the Responsible Wealth Project, whose 700 or so members argue that the country simply cannot afford to keep tax cuts for the wealthiest Americans who hardly need that cash.
“There are so many benefits that the wealthy have,” Hollender told NEWSWEEK’s Nancy Cook.
“…if you came from a much less affluent background, I could see someone having a more hard-edged attitude about money—like, “I made it all myself, so let me keep every penny I can.” [But] I would hope that someone who came from a less affluent background would have more compassion. The challenge is that I don’t believe in starting out poor or starting out rich. A lot of it is luck, and we’re standing on the backs of those who came before us.