With House lawmakers slated to vote on extending Bush-era tax cuts this week—and with the elections a mere 100 days away—Democrats, including President Obama, are wielding taxes as a hammer against their Republican opponents.
House Republicans will present a bill this week that would preserve tax breaks championed by then-President George Bush in 2001 and 2003, but would negate the subsequent benefits—including earned income credit and expanded child tax credit provisions—awarded to about 25 million middle-class households in 2009.
Democrats have countered with a plan that preserves the current tax rates for about 98 percent of Americans—those earning up to $200,000 individually and $250,000 jointly.
The tax cuts are set to expire at the start of 2013. The Senate has already voted to accept the Democrat’s plan. But, as Washington lawmakers approach a scheduled five-week recess to start at the end of the first week in August, if the House votes otherwise and the differences in the two bills aren’t resolved, the matter will not be revisited until after the general election in November.
Democrats have already begun to make the issue part of their campaign strategy, both in the congressional and presidential races, as the economy remains the top concern among voters.
In a series of online ads released this week, the Democratic Congressional Campaign Committee targets 23 Republican candidates, saying the lawmakers favor tax cut for millionaires at the expense of the middle class and seniors.
“Good news! Republicans want to cut your taxes,” the spot reads, showing an “Average Joe” before declaring, “Not you—YOU!” then switching to a wealthy man with a mansion in the backdrop. “And you deserve a tax break—after all, these things are expensive.
“So Republicans want to give you, the millionaire, another tax break—all while charging seniors $6,000 more for Medicare!”
Showing people shopping the ad continues, “This guy? Her? They don’t need it. They’ll just buy groceries and pay the mortgage. But you’re going places!” The spot ends, showing the rich guy getting into a jet and taking off.
“Democrats are on the offense again as House Republicans vote this week to protect tax breaks for millionaires instead of strengthening the middle class,” said DCCC Chairman Steve Israel in a statement. “Under House Republicans’ top-down economics, millionaires, corporations that outsource jobs, Big Oil and special interests get a $130,000 tax break which we can’t afford. Democrats are holding Republicans accountable for their misplaced priorities and the heat is on House Republicans for putting millionaires and special interests first, and the middle class and seniors last.”
The Democratic attack coincides with an Obama campaign strategy to define presumptive GOP presidential nominee Mitt Romney, a wealthy businessman, as an out-of-touch plutocrat. In its latest paid spot, the campaign questions Romney’s reluctance to release more of his tax records, and suggests that Romney may not have paid his fair share.
Additionally, the White House’s National Economic Council just released a report explaining President Obama’s plan to grow the economy through the strengthening of the middle class, beginning with maintaining current tax levels.
“Today, while Republicans and Democrats in Washington rarely see eye?to?eye, everyone agrees that extending middle class tax cuts will give working families and our economy a little more certainty at this make?or?break moment,” the report reads.
Republicans have said that not extending the tax cuts to the nation’s highest income 2 percent income earners will be a hardship for small business owners.
But it is middle-income Americans who will suffer most, according to the economic council report. If the extension isn’t passed, on Jan. 1, 2013 tax cuts such as the expanded Child Tax Credit, the 10 percent tax bracket, marriage penalty relief, and the American Opportunity Tax Credit all will expire. And about 114 million middle-class families could see their taxes increase by an average of $2,200.