Las Vegas Sun

September 4, 2015

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Politics:

Obama working to garner public support for his approach to ‘fiscal cliff’

As Congress settles in for a long winter’s fight over how to avoid the "fiscal cliff," President Barack Obama is trying to foment a popular movement to press lawmakers to resolve the issue — preferably his way.

The White House launched a campaign Wednesday aimed at framing the fiscal cliff standoff as a fight to extend tax cuts for the middle class, who they say will lose about $2,000 to increased taxes if Congress doesn’t strike a deal.

Obama urged citizens to “call your members of Congress, write them an email, post it on their Facebook walls” and tweet about middle-class tax cuts using the hashtag “#My2k.”

In Nevada, it’s actually a little more than $2,000, according to figures the White House released Wednesday. The White House estimates that a family earning $65,200 — approximately the state’s median household income — will end up paying $2,200 more in taxes if rates are allowed to rise back to where they were in the 1990s.

The White House estimates that would crunch Nevada’s economy by about 1.5 percent and that Nevadans could end up spending about $1.8 billion less in 2013 than they would if the tax rates for income levels below $250,000 remain where they are.

But the White House’s new campaign, even with a newly dedicated hashtag, is a new spin on an old fight. Republicans and Democrats have been at odds for years over how to extend the tax cuts that were put in place in 2001 and 2003. Republicans want to see tax cuts extended at all levels. Democrats would rather see tax rates on income levels above $250,000 rise. Obama said this month he was prepared to veto any bill that didn’t raise the tax burden on the rich.

Resolving the tax issue is a crucial component of staving off the fiscal cliff, the end-of-year juncture at which rising tax rates and scheduled budget cuts are expected to cause the economy to shrink, should they go into effect unmitigated.

While no action means that tax rates will rise across the board, extending some portion of the cuts is not the only way to resolve the standoff. Congress has been talking for a long time about doing a tax overhaul, and in the waning weeks of the campaign season, both the Republican and Democratic candidates for president indicated a willingness to discuss capping tax deductions as a way of raising the effective tax rate on the wealthy.

But none of those solutions are as simple, or as speedy, as tax cut extensions — and lawmakers have less than five weeks to figure it out.

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