Extension for wealthy possible
WASHINGTON – Vice President Joe Biden said the administration may be open to extending the Bush-era tax cuts to higher income households, another volley in the simmering tax debate that is likely to be the top order of business in a lame-duck Congress after the midterm elections.
President Barack Obama has said the nation cannot afford tax breaks for the wealthy because they will boost the cost to nearly $4 trillion, but Biden suggested a willingness to extend the tax cuts to households making more than $250,000,
“We’re open to speak to the Republicans, if they really mean it,” Biden said, according to a Bloomberg report of his interview Friday evening on Bloomberg Television’s “Political Capital with Al Hunt.” “If they’re talking about deficit reduction, if they’re willing to move, I think there’s a possibility.”
Aides downplayed Biden’s comments Saturday, saying the vice president has said nothing different from what the Obama administration has maintained throughout the debate: The tax cuts must be extended on middle-class households before considering tax breaks for the wealthy.
A potential compromise offer from the administration would be a nod to Republicans, and some moderate Democrats, who have insisted that the tax breaks should be permanently extended to all households. Obama proposes extending tax breaks only for couples making less than $250,000, or $200,000 for singles.
Unable to resolve the issue before lawmakers left Washington to campaign for the Nov. 2 election, Congress punted until it returns. The tax breaks are set to expire at the end of the year.
How to handle the expiring tax cuts has drawn heated debate on the campaign trail as Democrats struggle against a Republican tide that analysts say could put the House in GOP control. Doing nothing would affect nearly every American taxpayer Jan. 1.
Republicans have so far refused to budge, insisting that those making beyond $250,000 also get permanent tax cuts, despite the additional cost to the deficit. They argue higher taxes would curtail a struggling economy.
The tax cuts were passed in 2001 and 2003. Not only would marginal tax rates rise if nothing is done, but taxpayers would also see the return of the so-called marriage penalty, a higher estate tax, a reduced child tax credit and others.
Tax analysts say fewer than 2 percent of Americans would be hit with a tax increase under Obama’s proposal. Some of them are small-business owners or professionals, including lawyers.
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