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 $250,000which amounts to between 2 percent and 3 percent of the United States populationwill see their taxes go up when the current breaks expire in 2011.
We think thats 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 years tax breaks for those making less than $250,000 continue. Meanwhile, opponents of greater taxation of the highest-earning Americanssuch as former House Speaker Newt Gingrichsaid it may push the economy back into recession. According to the governments 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 Obamas popularity has already suffered as an increasing number of Americans have given him poor marks for his handling of the economy.