By Andrew Taylor, Associated Press
WASHINGTON (AP) — A possible compromise on extending Bush-era tax cuts for rich and poor alike — at least for a while — is in the works after the Republican triumph in midterm elections.
A day after President Barack Obama signaled flexibility on taxes following the "shellacking" voters delivered to Democrats, White House press secretary Robert Gibbs said Obama is willing to consider a compromise for a one- or two-year extension of the full roster of tax cuts, even for families earning more than $250,000 a year.
"He'd be open to having that discussion," Gibbs said.
Obama's long-standing position has been that individuals with incomes less than $200,000 a year and couples making less than $250,000 should continue to enjoy the tax cuts enacted during George W. Bush's presidency, but that those making more should return to the higher rates before Bush took office.
The tax cuts, enacted in 2001 and 2003, are due to expire Dec. 31. They include lower income tax rates, a $1,000 per-child tax credit, relief for married couples and lower taxes on investments and large estates.Gibbs said the White House wants the issue dealt with before Jan. 1 so that taxpayers will avoid seeing more money withheld from their paychecks or being hit by the higher alternative minimum tax. This would produce an average $3,700 higher tax bill come April for some 30 million middle-income families.
"I think what the president believes is that we have both houses coming back and that this is an issue that must and has to be dealt with in that session," Gibbs said.
Republicans welcomed the developments but expressed caution since the White House hasn't been more explicit.
"I take any signal that the president may be backing off his pledge to raise taxes on small businesses as a good sign, but we have to see where this discussion goes," said Rep. Dave Camp, R-Mich., who will become chairman of the tax-writing House Ways and Means Committee in January.