White House warns of $1,600 tax hike on 114M middle-class families

The White House has launched a new offensive in its fight with congressional Republicans over taxes, arguing 114 million middle-class families will see their taxes rise without action by Congress.

A report from President Obama’s National Economic Council released Monday contends the families would see their taxes rise by an average of $1,600 if the George W. Bush-era tax cuts expire as scheduled at the end of the year.

The report is the latest effort by President Obama to corner Republicans on taxes.


The GOP has argued that all of the Bush-era rates should be extended for a year, and the House is expected to vote to approve that extension next week. 

The Democrat-controlled Senate is expected to vote this week on legislation to extend tax rates only on those with annual income up to $250,000. Senate Republicans are pressing for a separate vote to extend all of the tax rates.

Republicans believe the fight will work to their advantage, as they argue Obama's plan would amount to a tax hike on millions of small businesses. But Democrats believe the contrasting votes will highlight their party's support for the middle class. It dovetails with Obama's reelection argument, that congressional Republicans and GOP candidate Mitt Romney will put tax cuts for the rich above priorities for the middle class.

Neither effort is expected to reach Obama’s desk, so the votes — and the new White House report — are primarily about the fall campaign.

“Today, while Republicans and Democrats in Washington rarely see eye to eye, everyone agrees that extending middle-class tax cuts will give working families and our economy a little more certainty at this make‐or‐break moment,” the report says. “So far, the only reason the middle-class tax cuts have not been extended is that Republicans in Congress continue to insist on cutting taxes once again for the wealthiest few.”

Sen. Patty MurrayPatricia (Patty) Lynn MurrayTech executives increased political donations amid lobbying push Schumer, Tim Scott lead as Senate fundraising pace heats up Sunday shows preview: As delta variant spreads, US leaders raise concerns MORE (Wash.), the Democratic co-chairwoman of the 2011 deficit-reduction supercommittee, said last week that Democrats would let income tax rates rise across the board if Republicans refuse to drop their opposition to raising new taxes. Senate Democratic leaders have endorsed her declaration. 

A spokesman for House Speaker John BoehnerJohn Andrew BoehnerFreedom Caucus presses McCarthy to force vote to oust Pelosi Stripping opportunity from DC's children Here's what Congress is reading at the beach this summer MORE (R-Ohio) said it was “troubling” that Democrats were willing to allow tax cuts to expire en masse.

“This ‘report’ states the obvious: raising taxes is bad for the economy,” Brendan Buck told The Hill in an email. “That’s why it’s troubling that the President would be willing to destroy more than 700,000 jobs by allowing taxes to go up on so many small businesses and families.”

Alexander Bolton contributed to this story.

This story was updated at 10:58 a.m.