By Mike Lillis - 07/09/12 06:11 PM EDT
House Democratic Whip Steny Hoyer (Md.) said this week that President Obama is right to ask those earning more than $250,000 annually to pay more taxes next year.
Some Democratic leaders — notably Sen. Charles Schumer (N.Y.) — have broken with Obama to support a tax hike only on those earning more than $1 million per year.
“I think the president is correct — $250,000,” Hoyer said during an economic forum sponsored by the Center for American Progress in Washington. “I would be prepared to go lower at some time in the future ... but our economy is still struggling, and I think going lower than that would have an adverse impact on the economy.”
But, Hoyer added, “I don't think going higher than that will have an adverse impact on the economy.”
The debate over what to do with the Bush-era tax rates is shaping up to be among the most contentious among a long list of thorny issues Congress must address before the end of the year. Republicans want to extend the lower rates for all incomes forever, while Democrats want to allow the cut to expire on the nation's highest earners. What Obama and congressional Democrats have yet to agree on, however, is how to define that category.
Without congressional action, the lower rates will expire for all income levels in January.
Obama on Monday doubled down on his previous assertion that families earning above $250,000 per year — and individuals earning above $200,000 — should not get the extended benefit next year.
“Let’s not hold the vast majority of Americans and our entire economy hostage while we debate the merits of another tax cut for the wealthy,” Obama said.
But Schumer, who represents many Wall Street fortunes and other wealthy New Yorkers, has advocated instead for a $1 million cut-off.
House Minority Leader Nancy Pelosi (Calif.) has been more cagey, suggesting she'd prefer the $250,000 threshold in practice but also pushing GOP leaders to vote on the $1 million level, which some Democrats say is easier to sell politically.
A statement issued by Pelosi's office Monday attempts to walk that fine line by praising Obama's push to extend the tax break for the "middle class" without specifying what income levels should define that category.
"Democrats and the president have always fought for an extension of the tax cuts for middle-income families to offer greater relief and economic certainty to all working Americans," Pelosi said, downplaying the Democratic division over what income levels should qualify for the continued benefit.
Hoyer on Monday characterized the $1 million threshold as “a metaphor” highlighting the position of Republicans who, he noted, “will not support increasing revenues on any [one] in America.”
“I think the president initially has it just about right at 250,” Hoyer said. “Clearly we want to make sure that working Americans — middle-income Americans — continue to have the ability to purchase goods.”