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Luetkemeyer says tax cut extension may be possible this session

Luetkemeyer says tax cut extension may be possible this session

November 16th, 2010 in News

Ninth District Congressman Blaine Luetkemeyer, R-St. Elizabeth, says it is possible the lame duck session of Congress may approve an extension of the Bush-era tax cuts.

"The big issue facing this lame duck Congress," Luetkemeyer said, "is whether to extend all of the critical tax cuts that I believe must remain in place to help all sectors of our economy, be it individuals, families or small businesses."

Luetkemeyer said before the election he did not believe chances of extending the tax cuts were possible because of the strong opposition from President Obama.

But Luetkemeyer said the president apparently has changed his views on the tax cuts.

"After the American people spoke loud and clear on Nov. 2, the president has had a change of heart," Luetkemeyer said. "Along with more than 40 Democrats who would have supported the extension of the tax cuts before the election, I am hopeful this lame duck session will be successful in extending the tax cuts."

A lame duck session occurs when Congress meets in November and December to conduct business before newly elected members of Congress take office in January.

If Congress fails to act, the tax cuts approved during the Bush Administration in 2001 and 2003 for everyone will expire on Dec. 31, meaning higher previous tax rates will go back into effect.

Luetkemeyer said increasing taxes during the current economic downturn would be a mistake and thwart job creation efforts in the private sector.

Obama wants to make the tax cuts permanent on income up to $250,000 and let the cuts on income higher than $250,000 expire, causing a big tax hike for those taxpayers.

If the tax cuts are allowed to expire for high income individuals for a year or two, the U.S. Treasury Department has estimated it would cost these taxpayers from $70 to $140 billion more. A permanent extension would require them to pay $700 billion more over 10 years.

If no extension is approved for middle class taxpayers with income under $250,000 a year, it will mean a tax increase for them of an estimated $3 trillion during the next 10 years. A two-year extension of the tax cuts for middle class taxpayers would save them about $383 billion in additional taxes.

Republicans want the tax cuts to be made permanent for everyone and keep all of the tax cuts granted to everyone in 2001 and 2003.

As a compromise, White House Senior Adviser David Axelrod said President Obama would accept a two-year extension of all tax cuts for middle and upper-income earners alike.

"We have to deal with the world as we find it. The world of what it takes to get this done," Axelrod said.

The White House later indicated Axelrod's statement was misunderstood and the president still wants to impose tax hikes on those earning more than $250,000 but is willing to compromise because he doesn't want to increase taxes for everyone.

"This lame duck session," Luetkemeyer said, "I will be arguing that folks in the 9th District of Missouri and across the nation deserve to keep more of their hard-earned money so that we can energize this economy instead of penalizing our people."