Politics
Obama seeks tax cut and campaign donations
One trip, two money pitches. President Barack Obama wants more money in the pockets of U.S. workers, and in his campaign treasury.
With both goals in mind, the president was to travel Wednesday to swing-state Pennsylvania to press his case for a bigger temporary payroll tax cut that will boost paychecks. He then will descend on donor-rich New York City to raise money for his already flush re-election bid.
The one-day trip to Scranton, Pa., and New York illustrates the dual policy and political demands on Obama as the 2012 campaign season nears. It also draws attention to the different audiences that politicians must court, particularly in a weak economy.
Obama is pushing Congress to extend and expand this year’s payroll tax cut, a move designed to increase consumer demand and boost the economy. If Congress does not act by year’s end, the full payroll tax of 6.2 percent would be restored, increasing taxes on 160 million Americans.
To make Obama’s case, the Treasury Department on Wednesday released a report listing state-by-state estimates of how many taxpayers received tax breaks under this year’s 2 percentage point reduction in the payroll tax. For example, the report states that 6.7 million Pennsylvanians will have received US$4.7 billion in tax cuts this year. The figures reflect state populations, with California at the top with 16.7 million workers getting US$12.6 billion in tax cuts; Wyoming finished the list with 300,000 workers getting US$200 million in tax breaks.
As the deadline approaches, bipartisan political support is building for at least continuing the tax cut, heading off a politically bruising tax hike. But Obama wants the cost of the payroll tax cut to be made up by an increase in taxes on taxpayers who earn more than US$1 million, a trade-off that Republicans reject.
White House adviser David Plouffe on Wednesday described Obama’s plan as “a tax cut for 160 million Americans paid for by asking a little over 300,000 millionaires to pay a little bit more.”
Appearing on NBC’s “Today,” Plouffe said: “If we don’t extend this working tax, every American would see their taxes go up. In this economy we can’t afford it.”
