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US President seeks to end tax breaks for wealthy US citizens

US President Barrack Obama has called for the rich to pay higher taxes in a bid both to assist with his spending priorities and to cut the deficit. He said that the time had come “to let the tax cuts for the wealthiest Americans…expire”. The tax breaks are in place for those earning over $250,000. President Obama wants the tax rates for these high earners to revert to those that were in place under the Clinton administration.

“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,” the President said. “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.”

Tax cuts that were put in place by the Bush administration for the majority of Americans (98% of US earners are below the $250,000 threshold) are likely to stay in place, at least for another year, in order to provide stability for business owners and middle class Americans who would, on average, see their taxes increasing by $2,200 from 1st January 2013 if the tax cuts were stopped for everyone.

These measures will, of course, be discussed in Congress, but President Obama has urged that the extension for lower earners is passed soon.

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