We’re here today to talk about taxes — something that everybody obviously cares deeply about. And I’ve often said that our biggest challenge right now isn’t just to reclaim all the jobs that we lost to the recession — it’s to reclaim the security that so many middle-class Americans have lost over the past decade.
Our core mission as an administration and as a country has to be, yes, putting people back to work, but also rebuilding an economy where that work pays off — an economy in which everybody can have the confidence that if you work hard, you can get ahead.
What’s holding us back from meeting these challenges, it’s not a lack of plans, it’s not a lack of ideas — it is a stalemate in this town, in Washington, between two very different views about which direction we should go in as a country. And nowhere is that stalemate more pronounced than on the issue of taxes.
Many members of the other party believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth.
I disagree. I think they’re wrong. I believe our prosperity has always come from an economy that’s built on a strong and growing middle class — one that can afford to buy the products that our businesses sell; a middle class that can own homes, and send their kids to college, and save enough to retire on.
That’s why I’ve cut middle-class taxes every year that I’ve been President — by $3,600 for the typical middle-class family.
Moreover, we’ve tried it their way. It didn’t work. At the beginning of the last decade, Congress passed trillions of dollars in tax cuts that benefited the wealthiest Americans more than anybody else. And we were told that it would lead to more jobs and higher incomes for everybody, and that prosperity would start at the top but then trickle down.
And what happened? The wealthy got wealthier, but most Americans struggled. Instead of creating more jobs, we had the slowest job growth in half a century. Instead of widespread prosperity, the typical family saw its income fall. And in just a few years, we went from record surpluses under Bill Clinton to record deficits that we are now still struggling to pay off today.
So we don’t need more top-down economics. We’ve tried that theory. We’ve seen what happens. We can’t afford to go back to it. We need policies that grow and strengthen the middle class — policies that help create jobs, that make education and training more affordable, that encourage businesses to start up and create jobs right here in the United States.
So that’s why I believe it’s time to let the tax cuts for the wealthiest Americans — folks like myself — to expire. We’ve got this huge deficit, and everybody agrees that we need to do something about these deficits and these debts. So the money we’re spending on these tax cuts for the wealthy is a major driver of our deficit, a major contributor to our deficit, costing us a trillion dollars over the next decade.
I’m not proposing anything radical here. I just believe that anybody making over $250,000 a year should go back to the income tax rates we were paying under Bill Clinton — back when our economy created nearly 23 million new jobs, the biggest budget surplus in history, and plenty of millionaires to boot.
And this is not just my opinion. The American people are with me on this. Poll after poll shows that’s the case. And there are plenty of patriotic and very successful, very wealthy Americans who also agree, because they know that by making that kind of contribution, they’re making the country as a whole stronger.
If Congress doesn’t do this, millions of American families could see their taxes go up by $2,200 starting on January 1st of next year. And that would be a big blow to working families, and it would be a drag on the entire economy.
So my message to Congress is this: Pass a bill extending the tax cuts for the middle class; I will sign it tomorrow.
Our top priority has to be giving middle-class families and small businesses the security they deserve. That’s what I’m focused on every day, and I hope Congress will join me in doing the right thing.
Excerpted from remarks by President Barack Obama on extending tax cuts for middle class families.