In this era of economic downturn, the middle-class is the most effected of the lot. With the presidential elections set to be held in this year of 2012, the candidates are focusing on middle- class. Now whether it is a political move or for the middle- class public for real is a matter of only perception.
The tax cut that began during the Bush era were initially meant to last till January 1, 2013, but looking at the present economic situation of unemployment and depression Pres. Barack Obama has taken up the task of extending this limit. He contends that the families, individuals and businesses earning below $250,000 level should be allowed this tax cut.
Like each time, even this proposal has not been accepted wholeheartedly and without resistance. The two sides have a different story to bring forth. The Republican Leader John Boehner says that “All economists would agree that raising taxes at such a point in economy is not correct” (for the interview please visit the following link: http://www.youtube.com/watch?v=NehaoNEpqHw). Hence, the tax- cut should extend to all Americans and all sections of the society.
On the other hand, Pres. Obama said while addressing the press on July 9, 2012, “This [move] is to reclaim the security which is lost by so many Americans over the past decade”. (Glimpse of this video can be seen at: http://www.youtube.com/watch?v=4QIvERcsnd8) The rate of unemployment and economic instability has leached into the system and minds of all working families which needs to be given rest as per Pres. Obama.
Sen. Tim Johnson feels that “If Congress doesn’t act, middle class families will see their taxes go up by $2,200 on Jan. 1. Working families in these tough economic times should have the certainty of knowing their taxes won’t go up in six months.”
The view of analysts is also well divided on this issue. Some analysts feel that the U.S. economy will be loosing a great amount of revenue which comes in the form of taxes. These taxes would help the nation regain its economic stability. Another set of analysts feel that the extension in tax-cuts would make it easier for the middle class to survive. Examples like foreclosures have been used to explain the situation. In case of a foreclosure in your neighbourhood, the rate of your property goes down as well. This is known as the ripple effect. This holds good even in an opposite situation, which can be seen only with the tax cuts for the middle class.