Tax cut plan: If it fails, average tax bill to rise $1,600
| WASHINGTON
A standoff with Congress that results in the January expiration of wide-ranging聽tax聽cuts would mean 114 million families would see average聽tax聽increases of $1,600 next year, the White House says.
In a report Tuesday on the聽tax聽standoff with Republicans, the White House tried putting a human face on the showdown and shifting the blame to the GOP.
"So far, the only reason the middle-class聽tax聽cuts聽have not been extended is that Republicans in Congress continue to insist on聽cutting聽taxes聽once again for the wealthiest few," the report said.
Republicans want to renew all the聽tax聽cuts聽for one year to give the two sides time to negotiate permanent聽taxchanges. President Barack Obama and Democrats also want a yearlong extension, but insist they will only extend the reductions for households earning below $250,000.
Last week Sen. Patty Murray, D-Wash., a member of her party's leadership, said if there was no deal by January, her party would be willing to let all the聽tax聽cuts聽expire to pressure Republicans to give ground. Republicans immediately accused Democrats of being willing to raise聽taxes聽on everyone as the price for prevailing.
"They're ready and willing to go right off the fiscal cliff if they don't get their way," Senate Minority Leader Mitch McConnell, R-Ky., said. He cited the frequently used term "fiscal cliff" to describe the economy-rattlingtax聽increases and spending聽cuts聽that will automatically take effect when 2013 begins unless lawmakers reach a compromise for avoiding them.
The $1,600 average聽tax聽increase is for all families earning under $250,000, White House officials said. The numbers of families from this group would range from 13.2 million in California to 200,000 in Wyoming, the report said.
The exact size of a family's聽tax聽cut聽would depend on its size, income and other characteristics.
A married couple earning $50,000 to $80,000 with two children would see a聽tax聽increase of $2,200, the paper said. A childless couple making $200,000, including $20,000 of capital gains income, would see their聽tax聽bill grow by $5,540.
The report did not include a figure showing the average聽tax聽increases that wealthier earners would face, but they would be substantially higher.
It included one example for a couple making $2 million in salaries and bonuses plus $500,000 from capital gains. They would get $7,080 in聽tax聽cuts聽under Obama's plan, which allows a聽tax聽cut聽to all families for the first $250,000, and $124,000 under GOP proposals, the report said.
The partisan conflict will intensify this week when the Senate votes on a Democratic plan that denies聽tax聽cutsto higher earners, and perhaps on a GOP proposal extending聽tax聽cuts聽for all. Both are certain to fail.
