"In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans," Obama said. "But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can't afford it. And I refuse to renew them again."
Obama's emphasis on generating tax revenue from top earners reflects his 2008 campaign pledge not to raise taxes for individuals earning less than $200,000 a year or married couples earning less than $250,000, said Diane Lim Rogers, chief economist of the Concord Coalition in Arlington, Virginia, which advocates deficit reduction.
Obama didn't specifically mention that pledge in yesterday's speech.
"If we can't talk him into breaking that promise," Rogers said, "then the second-best thing we could do is to tackle the really big tax expenditures and limit them to only people he deems middle class and below."
Individual Tax Code
Obama proposed a version of that concept in his 2012 budget. He suggested capping itemized deductions at 28%, which would limit benefits for taxpayers with high incomes. In yesterday's speech, he said he wanted to go further.
Obama's speech marked his first attempt to seek major changes in the structure of the individual tax code, beyond the corporate tax proposals he made in the State of the Union address.
He reiterated his support for lowering the corporate tax rate and removing business tax breaks. His backing for revenue- raising tax changes puts him at odds with many congressional Republicans, including House Majority Leader Eric Cantor of Virginia and Ways and Means Chairman Dave Camp of Michigan, who contend that deficit reduction should be accomplished through spending cuts alone.
"Any plan that starts with job-destroying tax hikes is a non-starter," Boehner, an Ohio Republican, said in a statement yesterday.
Deficit Commission