White House: Tax hike threat could hurt retailers, cost middle class families thousands per year
Hikes could cost middle class families $2,200/year
Last Updated: 380 days ago
WASHINGTON - Congress and President Obama have until the end of the year to avoid tax increases that could cost middle class families $2,200 a year.
Across the board tax increases would do away with rates set during the administration of President George W. Bush and restore higher tax rates in place during President Bill Clinton's administration when the economy was robust and the federal government had a budget surplus.
Many middle income taxpayers also would be exposed to automatic tax increases under the Alternative Minimum Tax, which is designed to guarantee a certain level of tax payment by wealthier taxpayers.
According to the report, a married couple earning between $50,000 and $85,000 with two children would see a $2,200 increase in their taxes.
Obama wants the Bush-era tax rates to remain at their current level for households earning less than $250,000. He is calling on Congress to increase taxes for families earning more than that threshold.
Obama's plan is part of an overall deficit reduction package that would increase tax revenue by about $1.5 trillion and reduce spending by a similar amount over 10 years.
Congressional Republicans, led by House Speaker John Boehner of Ohio, have said they are open to including tax revenue in any budget package but have balked at any plan that raises tax rates on wealthier taxpayers. They argue that higher rates would also hit some small businesses.
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