Obama may delay tax-cut rollback for wealthy (updated)

[ProSense]

Obama may delay tax-cut rollback for wealthy

By Randall Mikkelsen Randall Mikkelsen – 2 hrs 43 mins ago

WASHINGTON (Reuters) – President-elect Barack Obama may consider delaying a campaign promise - to roll back tax cuts on high-income Americans - as part of his economic recovery strategy, two aides said on Sunday.

David Axelrod, the Obama campaign strategist who was chosen to be a senior White House adviser, was asked if the tax cuts could be allowed to expire on schedule after tax year 2010 rather than being rolled back by legislation earlier. "Those considerations will be made," he said on "Fox News Sunday."

Bill Daley, an adviser to Obama and commerce secretary under former President Bill Clinton, said on NBC's "Meet the Press" that the 2010 scenario "looks more likely than not."

President George W. Bush's tax cuts are set to expire at the end of 2010. After that they would revert to 2001 levels, when the top individual tax rate was 39.6 percent.

Obama has called for reducing taxes for the middle class, but requiring the wealthiest Americans to pay more than the current top rate of 35 percent.

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Updated to add, from the NYT:

Some Republicans might be won over should Mr. Obama decide not to repeal the Bush tax cuts for those making more than $250,000. By simply letting the cuts expire after 2010, as the law now provides, Mr. Obama would in effect delay the tax increase that high-income taxpayers would have faced in the next year or two under his original plan.

That could have economic and political benefits. Mr. Obama would not be open to the charge from Republicans and other critics that he is raising taxes in a recession, which many believe is counterproductive. His Republican presidential rival, Senator John McCain of Arizona, had raised that argument during the campaign.

By letting the tax cuts expire, Mr. Obama would get the benefit of higher revenues in 2011 and beyond to help finance his promised health care plans without having to propose raising taxes on the affluent and without the Democratic majority in Congress having to vote on a tax increase.

Also, Mr. Obama is under far less pressure in the short term to raise revenues to help finance campaign promises because the seriousness of the economic crisis has brought bipartisan agreement that the government must do whatever it can to spur economic growth.

Mr. Bush and the Republicans who controlled Congress in 2001 agreed that his tax cuts would expire after 10 years as a way of minimizing the projected revenue losses in future years, to comply with congressional budget rules and to help pass the legislation. The president repeatedly called for making the tax cuts permanent, but no action was taken.

[...of J.Temperance]

1. There is a huge thread about this already, here's the link:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3614754

[ProSense]

3. Thanks for the link. n/t

[...of J.Temperance]

5. Thanks for the update ;) n/t

[...of J.Temperance]

2. All President Obama is going to do is let the W tax cuts expire in 2010

Which is both the smart thing to do, economically and politically.

[WCGreen]

4. You are exactly right....

People have made tax plans based on the tax situation in hand. It is the prudent and fair thing for Obama to do...

[...of J.Temperance]

6. It's definately not a "The Sky is falling" type thing, that's for sure n/t