House Speaker John A. Boehner meets with reporters on Capitol Hill. (J. Scott Applewhite / Associated…)
WASHINGTON -- Congressional Republicans reacted swiftly to the latest report on the nation's sluggish economic growth, saying the outlook amplifies their position that now is not the time to raise tax rates on the wealthy, as President Obama has proposed.
"Today's GDP report is a troubling sign for the future of our economy, and it underscores the need to stop all of the looming tax hikes," House Speaker John A. Boehner (R-Ohio) said in a statement. "If the president is serious about helping rebuild this economy, he will work with Republicans to stop these tax hikes and reform the tax code to create a better environment for private-sector job creation."
The Commerce Department reported Friday that the nation’s gross domestic product grew at an annual rate of 1.5% in the April-June quarter, which was a bit higher than analysts had expected but down from earlier in 2012.
The House is set to vote next week on a GOP proposal that would keep the existing tax breaks across all income levels, including the wealthy, for another year. Various income tax breaks from the George W. Bush era are set to expire in December. Obama wants to let those expire for the top earners: singles earning more than $200,000 a year, or $250,000 for married couples.
Democrats, though, said the report reinforces that Republicans should drop their insistence on tax breaks for all and approve those passed by the Senate for less wealthy taxpayers.
"House Republicans should stop holding middle-class tax cuts hostage in their drive to protect tax breaks for the wealthiest at all costs," said Rep. Steny H. Hoyer of Maryland, the No. 2 Democrat in the House. "I hope House Republicans will drop their obstruction and pass the Senate middle-class tax-cut bill immediately to ensure 98% of families and 97% of small businesses do not see a tax increase next year."
Under the White House plan, the top tax bracket would go from 35% to 39.6%, reverting to the levels that had been in place during the Clinton administration. Estate taxes would also rise, as would the tax rate on capital gains and dividends. The White House proposal was approved earlier this week by Democrats in the Senate.
"Small businesses and working families need to know that the government won't take more of their hard-earned money," said Eric Cantor (R-Va.), the majority leader. "That is why next week the House will vote to stop the tax hike for all Americans. It’s that simple."
Polls indicate that Americans largely support the Democratic view that wealthier income-earners should contribute more taxes, but that they also are concerned about tax hikes on businesses that could create jobs.
Analysts have said most such business owners -- individuals and families who file as corporations under the tax code -- would not see a tax increase because their earnings are not high enough, according to the nonpartisan Tax Policy Center. Less than 3% of those business owners earn beyond the threshold set for a higher tax rate under Obama's plan.
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