Obama: Recession Would Delay Tax Hikes
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WASHINGTON (AP) – Senator Obama says he would delay rescinding President Bush’s tax cuts on wealthy Americans if he becomes the next president and the economy is in a recession, suggesting such an increase would further hurt the economy.
Nevertheless, Mr. Obama has no plans to extend the Bush tax cuts beyond their expiration date, as Senator McCain advocates. Instead, Mr. Obama wants to push for his promised tax cuts for the middle class, he said in a broadcast interview aired today.
“Even if we’re still in a recession, I’m going to go through with my tax cuts,” Mr. Obama said. “That’s my priority.”
What about increasing taxes on the wealthy?
“I think we’ve got to take a look and see where the economy is. I mean, the economy is weak right now,” Mr. Obama said on “This Week” on ABC. “The news with Freddie Mac and Fannie Mae, I think, along with the unemployment numbers, indicates that we’re fragile.”
Mr. Obama was referring to the two mortgage companies taken over by the federal government today in what could become a huge taxpayer bailout. The nation’s unemployment rate climbed to 6.1% in August from 5.7% the month before, the government said last week. It was the first time in five years that the unemployment rate had topped 6 percent.
Messrs. Obama and McCain have sparred over tax policy for months. Mr. Obama says Mr. McCain wants to continue Bush administration policies, noting that Mr. McCain had voted against the Bush tax cuts but then embraced them as he campaigned for the Republican presidential nomination.
“John McCain likes to talk about fiscal responsibility, but there is no doubt that his proposals blow a hole through the budget,” Mr. Obama said.
Mr. McCain has repeatedly hammered Mr. Obama over taxes in an attempt to paint him as a typical tax-and-spend liberal. Mr. McCain wants to make permanent the Bush tax cuts, which are set to expire at the end of 2010.
“We can get this economy back on it’s feet,” Mr. McCain said in an interview aired today on “Face the Nation” on CBS. “Don’t raise their taxes. Get it going again. Americans are hurting in a way that they have not hurt for a long time.”
The Tax Policy Center, a think tank run jointly by the Brookings Institution and the Urban Institute, concluded that Mr. Obama’s tax plan would benefit middle-income taxpayers more than Mr. McCain’s. However, Mr. Obama would raise payroll taxes on taxpayers with incomes above $250,000, and he would raise corporate taxes. Small businesses that make more than $250,000 a year also would see taxes rise.
Mr. McCain’s plan cuts taxes across all income levels. It would cut taxes for those in the top 1% by more than $125,000, raising their after-tax income an average 9.5%, the center concluded.