Treasury Secretary: Bush-era tax breaks for wealthy must go
Geithner says tax breaks for super-rich 'cost $1 trillion over 10 years'
Speaking plainly on CNN, Treasury Secretary Timothy Geithner says that the Bush-era tax cuts for top incomes must go. Geithner, on the "State of the Union" along with other weekend talk shows, said he optimistic that the administration can reach a deal with Congress to avert a another recession. He was adamant that "what we're not going to do is extend those tax cuts for the wealthiest Americans."
Speaking plainly on CNN, Treasury Secretary Timothy Geithner says that the Bush-era tax cuts for top incomes must go.
Republican flatly rejected Geithner's proposal last week. House Speaker John Boehner declared he was "flabbergasted" by the plan. Geithner says that the administration "would be happy to look at an alternative plan, but they have to lie that out for us."
"What we can't do is sit here and trying to figure out what works for them," he said. "They have to come tell us what works for them."
The Bush administration tax cuts, which have already been extended by two years, are due to expire at the end of 2012. Spending cuts Congress approved during the Republican-led standoff over raising the federal debt ceiling in 2011 will also begin concurrently, cutting $1 trillion over 10 years.
These measures would be coupled with other cuts, such as the end of a 2-percentage-point cut in Social Security payroll taxes and extended unemployment benefits for many jobless workers.
The non-partisan Tax Policy Center estimates middle-class families would pay about $2,000 a year more in taxes, or about four percent. The top one percent of taxpayers would see their tax bills go up around seven percent, or about $120,000.
The increases in addition to budget cuts would cut the projected federal budget deficit nearly in half. This also threatens millions of jobs, especially those dependent on government contracting, and risk a return to recession, the CBO found.
The plan administration officials presented to Republicans last week called for $1.6 trillion in new taxes, including letting income tax rates go back up for families making more than $250,000. This was a major plank of President Obama's successful re-election campaign. Obama also wants to close loopholes, limit deductions, and raise the estate tax rate to 2009 levels and increase taxes on capital gains and dividend taxes.
The proposal also calls for additional spending, including a new $50 billion stimulus package, a home mortgage refinancing plan, and an extension of unemployment insurance benefits.
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