Obama Rejects Tax Cuts for the Rich, Calls for Big Oil to Pay Fair Share

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The President came out swinging in a major economic policy speech in Cleveland, Sept. 8, against Republican Party obstructionism on economic recovery. He flatly rejected GOP plan's to give mammoth new tax cuts to the richest Americans and accused its leaders of pushing the "same philosophy that was tried for the last decade which led to the greatest economic crisis since the Great Depression: tax cuts for millionaires, cut rules for corporations, and leave the middle class to fend for itself."

Instead, President Obama called for a new package of tax cuts for working families, tax credits for businesses to purchase new equipment and for research and development, and infrastructure projects to spur job growth.

To pay for these proposals, administration officials told reporters the President wants to close tax loopholes for big oil companies and other companies that move jobs out of the country.

President Obama said he favors extending tax cuts for Americans earning $250,000 or less, while letting the Bush tax cuts for the very richest Americans sunset.

"We are ready, this week, to give tax cuts to every American making $250,000 or less," the President said. "For any income over this amount, the tax rates would go back to what they were under President Clinton."

He rejected Republican claims that this move would be bad for the economy, citing the high deficit. "We can’t afford the $700 billion price tag [for tax cuts for the rich]." He also recalled that with a similar tax code in place in the 1990s, the U.S. economy created 22 million jobs.

When the economic crisis began, President Obama said, "My hope was that the crisis would cause everyone, Democrats and Republicans, to pull together and tackle our problems in a practical way. "

"But as we all know, things didn’t work out that way," he said. Ideological and partisan considerations caused "[s]ome Republican leaders [to figure] it was smart politics to sit on the sidelines and let Democrats solve the mess."

House Republican Minority Leader John Boehner, R, Ohio, offered his party's views on the economy late last month, but, the President said, they were awfully familiar.

"There were no new policies from Mr. Boehner," he explained. "There were no new ideas. There was just the same philosophy we already tried for the last decade – the same philosophy that led to this mess in the first place."

Instead Republicans want to scale back the major accomplishments of the past year and a half. They want to allow health insurance companies to once again deny care for people who are sick and allow the credit card companies to raise interest rates unfettered, Obama pointed out. Republicans want to privatize Social Security and voted against family tax credits for higher education.

Indeed, the President continued, Republicans have kept tax loopholes for corporations that move jobs out of the country. "For years, Republicans have fought to keep these corporate loopholes open," he said.

"In fact, when Mr. Boehner was here in Cleveland he attacked us for closing a few of these loopholes – and using the money to help states like Ohio keep hundreds of thousands of teachers and cops and firefighters on the job," the President noted.

Referring to the jobs bill passed by Congress last month, President Obama explained that the closed tax loopholes will help pay to keep teachers in schools, cops on the beat, and firefighters protecting our families.

But Boehner "dismissed these jobs … as quote 'government jobs' – jobs that I guess he thought just weren’t worth saving," President Obama added.

"Mr. Boehner and the Republicans in Congress said no to these projects. Fought them tooth and nail," Obama emphasized.

"Though I should say that didn’t stop a lot of them from showing up at the ribbon-cutting ceremonies and trying to take credit," he said, referring to to the fact that numerous Republicans who voted against the recovery act have claimed credit for money brought to their home districts. "That’s always a sight to see."

Republican obstructionism and hypocrisy earned additional fire from White House Director of Communications Dan Pfeiffer who told reporters by a teleconference with the press, Sept. 8, Boehner and the Republicans want to return to the same policies that caused the crisis and hurt America's working families in the first place.

"We know the policies that Leader Boehner and the Republicans are advocating," Pfeiffer said, citing the huge deficits, the financial meltdown, and jobs crisis. "We know what they'll do. We're still reaping the consequences of that."

Deputy Assistant to the President for Economic Policy Jason Furman touted the Obama administration's accomplishments in the economy. In addition to the recovery act, President Obama's legislative accomplishments include the "cash for clunkers" program, extension of the homebuyer tax credit, tax credits for businesses to hire unemployed workers and those involved in infrastructure projects, and the passage of the new jobs bill last month.

Furman also noted that new tax credits the President has proposed would be designed to benefit companies who do research and development here in the U.S. He added that the President wants to pay for new tax credits and infrastructure projects by ending massive government tax subsidies for the biggest oil companies.

"The big oil companies actually pay lower tax rates on their profits than most other corporations in the economy," he said. "Get rid of those tax breaks so the big oil companies are being treated just the same as every other corporation when it comes to taxes."

Furman added that new revenue could be created by closing some 350 remaining loopholes that still provide incentives for companies who move their profits, investments and jobs out of the country.

Photo: President Obama speaks in Cleveland on the economy. (White House Photo)

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  • @Pete That is a common misconception. Consider this: Big Oil companies get enormous taxpayer subsidies on their already profitable business. And do those savings get passed on? Low taxes do not ever equate with low prices.

    Posted by la rosa, 07/27/2011 8:00am (3 years ago)

  • Closing tax loopholes on corporations: Won't the corporations simply pass along any additional taxes in the cost of goods/services they produce? Who ends up paying the additional "corporate" taxes? The consumer.

    If that happens, and companies increase the cost/price of their goods/services, will that adversely affect their competitive position against other non-US producers?

    Posted by Pete Wishneusky, 07/26/2011 7:09pm (3 years ago)

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