President Obama's Bipartisan Tax Cut Agreement

The President has continually called for an extension of the middle-class tax cuts only because middle-class families have borne the brunt of this economic crisis and they need their leaders to fight for them. Raising taxes on the middle-class right now would be crippling to the economic recovery and unfair to working families.

· While Democrats fought for middle-class families, Republicans in Congress have advocated for an extension of tax cuts for the wealthiest 2%. Economists agree that tax cuts for the wealthy do little to help our economic recovery. The President fought this effort that would cost $700 billion because at this time we need to reduce the deficit.

· For weeks, the debate has been at a standstill with both sides unwilling to give in, and this may have been a stalemate that continued into the coming new year. So the President had a choice: allow a tax hike for almost every American on January 1st, or work to find a compromise.

· If the current tax cuts were allowed to expire, a typical family would see a $3,000 tax increase and the economy could have shed more than one million jobs. The President refused to allow the stalemate to cost working Americans their livelihoods. But he also refused to permit Republicans to give millionaires and billionaires tax cuts while they blocked an extension of unemployment benefits for laid-off American workers and other middle class and small business tax relief.

· The bipartisan agreement reached this week will ensure that every American family keeps their tax cuts for the next two years and protects tax cuts for working Americans. And by giving Congressional Republicans a tax cut for the wealthiest Americans, the President has protected crucial tax cuts for working families that, without this deal, would have expired at the end of the year.

· These tax cuts include: the American Opportunity Tax Credit, which makes sure more than 8 million students and families won’t see college costs increase; the Earned Income Tax Credit, which helps families move out of poverty; and the Child Tax Credit, which will ensure that people don’t see their taxes increase by as much as $1,000 a child.

· Along with these tax cuts, this deal will also extend unemployment insurance for an additional 13 months, which will help two million Americans who are out of work through no fault of their own. If we had allowed this much-needed relief to expire, more Americans would have fallen on harder times, which would have hurt our economy further by reducing demand at this important point in our economic recovery.

· This deal also includes a 2 percent employee payroll tax cut for workers, which is something economists from across the political spectrum believe is one of the most important things we can do to create jobs and aid in economic growth.

· Last, by enabling businesses to completely write off their investments next year, the deal provides incentives for businesses to invest and create jobs. This is something the President has been advocating for since September to help American businesses create jobs, and now we’re going to see it get done.

· After two years, these tax cuts will expire. The President is confident that as we work hard and make the tough choices to decrease the deficit, we’ll see that we just can’t afford extending these tax cuts any more.

· But at this moment, the President believes this is the right step forward because it is a critical step in our path to economic recovery. It will prevent taxes for middle-class families from increasing, will help the private sector to create millions of additional jobs, and it will help build the momentum our economy needs at this critical time.

Posted on 12 Dec 2010, 15:57 - Category: DNC

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