President Obama unveiled his latest proposal Monday to extend for one year tax
cuts for those making $250,000 or less, a move widely viewed more as staking
out campaign territory in an election year than a cause for Palm Beach
accountants to call urgent meetings with clients who make more.
"Let's not hold the vast majority of Americans and our economy hostage
while we debate the merits of another tax cut for the wealthy," Obama said.
GOP opponent Mitt Romney attacked the plan as raising taxes for those
making more than $250,000 while the economy is still sputtering. The president
says higher rates will affect only 3 percent of small businesses, but Romney's
camp says it would affect 53 percent of all small business income.
"The president is saying the American people are with me, but even
members of his own party are not agreeing with him," said Romney's Florida
communications director, Jeff Bechdel.
A number of Democrats in Congress have spoken in favor of extending tax
cuts for a larger group. Florida Sen. Bill Nelson's spokesman said Monday that
his favored position is "to permanently extend the Bush-era tax cuts for those
making under $1 million."
Obama's plan would mean a return to tax rates for higher earners in
effect at the end of President Clinton's administration, the last time the
federal government reported an annual surplus. That would mean rates above 39
percent for top earners, up from 35 percent now.
Obama's plan "has no chance" to pass Congress but is simply raising a
campaign issue, said Palm Beach County GOP chairman Sid Dinerstein. "His
proposal is for a massive tax increase on the job creators," he said.
State Sen. Chris Smith, D-West Palm Beach, said the president is sending
the right message and fighting for what he believes in. "I come down with the
president -- 250 is a good middle-class number," Smith said.
If higher rates do return, accountants say they're ready to advise
clients on such matters as postponing certain deductions to higher-tax years
or reporting some income earlier. But they want to wait and see what happens
by October or November.
Whatever its political significance, Monday's announcement was "mainly
for show, I think," said accountant Richard Rampell in Palm Beach.
Nationally, 2.09 percent of households earned $250,000 or more in 2010,
according to Census Bureau statistics that don't provide a precise breakout
for states and counties.
But it's a safe bet a higher proportion of households will be affected by
higher tax rates in a relatively affluent county like Palm Beach. Census
Bureau survey numbers show more than 6 percent of Palm Beach County households
earn at least $200,000, compared to 4.2 percent nationally and 3.6 percent in
Florida.
In the town of Palm Beach, 32.7 percent of households earn more than
$200,000.
There's plenty at stake for both parties in Florida. It's the nation's
most populous swing state in the presidential election, and Palm Beach County
has been a popular stop. It's a home to big donors for both parties.
Speaking at Florida Atlantic University in Boca Raton in April, Obama
called for changes to ensure those with incomes of more than $1 million paid
what he called their fair share of taxes. He's scheduled to come back for a
debate at Lynn University in Boca Raton in October.
Staff Researcher Michelle Quigley and The Associated Press contributed to
this report.
