At a town-hall style meeting broadcast on CNBC Monday, President Obama repeated his assertion that continuing tax cuts for the wealthy that were initiated by his predecessor would be harmful to the nation.
The president, speaking to an audience made up, equally, of small business people and representatives of Wall Street firms, acknowledged that much of the debate over tax cuts is fueled by concern about the federal deficit.
“This is why I want to extend tax relief for the middle class, for 97 percent of the population,” he said, “and even for the wealthy, up to the first $250,000 of their income.”
“But the GOP wants, essentially, to write checks of $100,000 and more, at taxpayer expense, to all the millionaires and billionaires. This is irresponsible,” the president said, “and I won’t do it.”
Obama said, “You can’t give tax cuts to the top two percent and lower the deficit at the same time – not when that tax cut costs $700 billion.”
The president also took on the Tea Party, saying it has “mis-identified the culprit.”
“The mess we have results from ill-advised tax cuts for people who didn’t need them and having to pay for two wars. That’s the $1.3 trillion deficit package, all tied up with a bow on top of it, that I had waiting for me when I took office.”
“What I ask the Tea Party,” Obama said, "is 'What would you do? Do you think we can cut $4 trillion out of the budget and that, magically, everything will work.' What I ask the Tea Party is, ‘Would you cut veterans benefits, end Medicare, end Social Security?'”
The president listed some of the things he felt should be done. Among them was elimination of tax loopholes for corporations. Obama said that corporations that once paid 39 percent of their profits in taxes now pay only 15 percent. “What would be wrong with taking them up to 20 percent?,” he asked.
Most of the small business people in the audience applauded. Only the day before Treasury Secretary Tim Geithner had argued strongly for support from small businesses for the president’s tax proposals. “The middle-class-tax cuts the president wants to extend,” Geithner said, “also go to 98 percent of small businesses.”
Bloomberg’s Al Hunt said yesterday that conservative Democrats, not just Republicans, were endangering the president’s tax proposals:
“In the House of Representatives, 31 Democrats wrote Speaker Nancy Pelosi a letter calling for extension of the so-called Bush tax cuts. Ironically, 23 of those Democrats are ‘blue dogs,’ members of a coalition dedicated to reducing deficits. Extending the upper income tax cuts would add mote than $700 billion to the U.S. budget deficit over the next decade.”
Rober Reich, secretary of labor during the Clinton administration, said, “The defining issue of this election is who should get the tax cut – the rich or everyone else.”
“Not a bad issue for Democrats to run on this fall,” he said. “Republicans are hell bent on demanding an extension of the Bush tax cut for their patrons at the top, or else they’ll pull the plug on tax cuts for the middle class. This is a gift for the Democrats.”
Nobel prize-winning economist Paul Krugman derided people he described as the “angry rich.”
“It has become common to hear vehement denials that people making $400,000 or $500,000 a year are rich," Krugman wrote in his New York Times column. "I mean, look at the expenses of people in that income class – the property taxes they have to pay on their expensive houses, the cost of sending their kids to elite private schools, and so on. Why, they can barely make ends meet.”
One of those "angry rich," billionaire investor Charles Munger, who was a staunch proponent of and defender of the Wall Street bailout, told Bloomberg yesterday that “there is danger in just shoveling money to people who say their life is a little harder than it used to be. At a certain place you’ve got to say to the people, ‘Just suck it in and cope, buddy.’”
The Reality-Based Community’s Michael O’hare discussed yesterday, on that website, complaints from the wealthy about Obama’s tax proposals.
“How does a third-of-a-million-a-year law prof/doctor couple and their three kids, barely scraping by already and falling before our very eyes to the very bottom of the top 1 percent of U.S. families by income, make out under Obama’s rapacious soak-the-rich commie attack on all that is holy and American and fine? His taxes will go down $3,700.”
Photo: President Obama stands firm on the need to extend tax cuts for middle class. (White House Photo)