Plagued with a ballooning deficit and national debt, the Obama administration is planning to let the Bush tax cuts for the wealthiest Americans expire next year, the Treasury Secretary has said.
Appearing on weekend TV programs, Timothy Geithner announced that those who make more than $250,000—which amounts to between 2 percent and 3 percent of the United States population—will see their taxes go up when the current breaks expire in 2011.
“We think that’s the responsible thing to do because we need to make sure we can show the world” that America is “willing as a country to start to make some progress bringing down our long-term deficits,” the secretary told This Week on ABC.
Geithner also signalled that the administration would like to see last year’s tax breaks for those making less than $250,000 continue. Meanwhile, opponents of greater taxation of the highest-earning Americans—such as former House Speaker Newt Gingrich—said it may push the economy back into recession. According to the government’s own predictions, the unemployment rate will likely stay above 9 percent until next year.
In this context, some commentators have warned about possible consequences for the Democrats this November, since President Obama’s popularity has already suffered as an increasing number of Americans have given him poor marks for his handling of the economy.