President Obama announced a five-fold, tax-cut plan Wednesday and vowed to simplify the “monstrous” tax code that baffles most Americans.
“We start from the simple premise that we should reduce the tax burden on working people,” said Mr. Obama, on the deadline day for filing 2008 tax returns.
The president also likened himself to a typical U.S. worker, saying he will end tax breaks for the wealthiest 2 percent of Americans “so that folks like me are paying the same rates that the wealthiest 2 percent of Americans paid when Bill Clinton was president.” Mr. Obama’s salary as president is $400,000 a year.
The plan also calls for ending “giveaways” for those who put their money in overseas tax havens.
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The first part of the five-fold plan took effect April 1 for roughly 95 percent of U.S. workers through the American Recovery and Reinvestment Act.
Mr. Obama said the cut will reach 120 million families and is the most progressive in U.S. history. The president said the cuts are intended to create jobs and jump-start economic growth.
Mr. Obama plans to help small businesses during the recession by extending from two years to five years the amount of time they can offset losses against their income. He said the plan could provide a record number of refunds for small businesses that would provide cash to maintain inventory and make payroll.
The president said he would simplify the student-loan process and provide a tax credit to help Americans afford a college education. Students would receive a $2,500 credit for all four years of college, which also would help the administration reach its 2020 goal of again having the highest proportion of college graduates in the world.
The remarks followed a morning meeting between Mr. Obama and several families from across the country.
Among those meeting the president were Kelly and Scott Kirkwood, of Lynchburg, Va.
The Kirkwood are the parents of two daughters, ages 3 and 7. Mrs. Kirkwood is a part-time nursery school teacher at Randolph College, in Lynchburg. Mr. Kirkwood is a graphic designer for a small company. The couple is trying to save money for their daughters’ education but are living from paycheck to paycheck. They qualify for the Making Work Pay tax credit, the White House said.
The plan also includes up to $8,000 in tax credits for first-time home buyers and cuts in the budget to reduce the federal deficit by $2 trillion.
“We’re cutting programs that don’t work, contracts that aren’t fair, and spending that we don’t need,” Mr. Obama said.
The president addressed criticism Tuesday during his speech on the recession about households being excluded from his administration’s multi-billion dollar taxpayer effort during the recession to bailout Wall Street, the U.S. auto industry and other parts of corporate America.
“I know a lot of you are saying ‘where’s my bailout,’ ” Mr. Obama said. “I understand the sentiment.”
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