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Category: Money

Obama Wants Compromise on Bush Tax Cuts

Written on November 04, 2010 by Japhet Writ

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"[M]y hope ... is that given [that] we all have an interest in growing the economy and encouraging job growth that we're not going to play brinkmanship but instead we're going to act responsibly." - US President Barrack Obama

A day after the won control over the House of Representatives, said that he is willing to negotiate to ensure that Bush cuts for middle class will be extended by January 1. The president has been declaring the he wanted the cuts to be permanently extended to $250,000 for married couple and $200,000 for single filers only. A part of the cut that applies to income over $250,000 would expire by December 31. Meanwhile, Republicans are pushing to permanently extend the cuts to everyone regardless of the income.

Senate Budget Chairman, Kent Conrad, pointed out that they can support temporary tax extension for upper-income households. On the other hand, Senate Banking Chairman, Christopher Dodd, have called for pushing the higher. According to some Washington tax policy analysts, the most likely compromise there will be is a temporary extension for everyone for one or two years.

A temporary extension for all poses less political risk for the Republicans, while can frame this scenario as a way to figure out how to slow the growth of US debt. According to the Treasury Department, making permanent for all income below $250,000 would cost three trillion dollars over a decade. On the other hand, making it permanent for would cost $700 billion over the same period.

What’s your opinion: Extend the tax cuts for all, or for the upper-income household alone?

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