President Obama took to Twitter for the White House’s first-ever Twitter Town Hall, answering questions from his “tweeps” about taxes, the economy and other subjects.
One of the questions from a Twitter user named Lane at Wednesday’s event asked, “What changes to the tax system do you think are necessary to help solve the deficit problem and for the system to be fair?”
Obama responded, “First of all, it’s important for people to realize that since I’ve been in office I’ve cut taxes for middle-class families, repeatedly. The Recovery Act cut taxes for 95 percent of working families. The payroll tax cut that we passed in December put an extra thousand dollars in the pockets of every family in America. And so we actually now have the lowest tax rates since the 1950s. Our tax rates are lower now than they were under Ronald Reagan. They’re lower than they were under George Bush—senior or George Bush, junior. They’re lower than they were under Bill Clinton. The question is how do we pay for the things that we all think are important and how do we make sure that the tax system is equitable? And what I’ve said is that in addition to eliminating a whole bunch of corporate loopholes that are just not fair—the notion that corporate jets should get a better deal than commercial jets, or the notion that oil and gas companies that made tens of billions of dollars per quarter need an additional break to give them an incentive to go drill for oil—that doesn’t make sense. But what I’ve also said is people like me who have been incredibly fortunate, mainly because a lot of folks bought my book—for me to be able to go back to the tax rate that existed under Bill Clinton, to pay a couple of extra percentage points so that I can make sure that seniors still have Medicare or kids still have Head Start, that makes sense to me.”
Obama noted that he had worked with Speaker of the House John Boehner, R-Ohio, in December to pass a payroll tax cut “that put an extra $1,000 in the pockets of almost every single American. That means they’re spending money. That means that businesses have customers. And that has helped improve overall growth.”
Boehner also tweeted a question, asking, “After embarking on a record spending binge that left us deeper in debt, where are the jobs?”
Obama responded, “We have provided at least 16 tax cuts to small businesses who have needed a lot of help and have been struggling, including, for example, saying zero capital gains taxes on startups because our attitude is we want to encourage new companies, young entrepreneurs, to get out there, start their business, without feeling like if they’re successful in the first couple of years that somehow they have to pay taxes, as opposed to putting that money back into their business.”
Another Twitter user named Neal asked about what incentives Obama would support to improve small business growth. Obama responded that both small and large businesses can fully depreciate the cost of their investments in plant and equipment this year. “That saves them a pretty big tax bill,” he noted.
Obama was also asked by a Twitter user named Craig about giving tax breaks to companies if they hire an honorably discharged veteran.
Obama said the White House had been talking internally about this proposal. “We’ve got all these young people coming back from Iraq and Afghanistan; have made incredible sacrifices; have taken on incredible responsibilities,” he said. “You see some 23-year-old who’s leading a platoon in hugely dangerous circumstances, making decisions, operating complex technologies. These are folks who can perform. But, unfortunately, what we’re seeing is that a lot of these young veterans have a higher unemployment rate than people who didn’t serve. And that makes no sense. So what we’d like to do is potentially combine a tax credit for a company that hires veterans with a campaign to have private companies step up and do the right thing and hire more veterans.” He added that he has made it a priority to encourage more hiring of veterans by the federal government.
Obama will be meeting Thursday with congressional leaders from both parties to negotiate raising the debt ceiling. He reportedly is willing to make concessions on cuts to Medicare and Social Security in exchange for Republicans agreeing to tax increases.
House Majority Leader Eric Cantor, R-Va., who walked out of bipartisan budget talks last month after there was an impasse over raising taxes, said Wednesday that Republicans were only willing to agree to changes in the Tax Code that would raise revenues in exchange for corresponding tax cuts. He will be among those meeting with Obama in Thursday’s talks.
"If the president wants to talk loopholes, we’ll be glad to talk loopholes,” said Cantor, according to the PBS Newshour. “We’ve said all along that preferences in the code aren't something that helps economic growth overall. But, listen, we are not for any proposal that increases taxes, and any type of discussion should be coupled with offsetting tax cuts somewhere else.”
Senate Majority Leader Mitch McConnell, R-Ken., said that eliminating tax deductions for certain industries could harm jobs. “When you target particular industries, you get fewer jobs,” he said. “And the biggest problem we have right now is the jobs problem. I’m open to tax reform. We need to do it broadly. To cherry-pick items in the context of this current negotiation with the White House strikes me as pretty challenging.”
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