Here we go again. President Obama on Monday urged Congress to pass a one-year extension of the Bush tax cuts for those earning less than $250,000 a year. The president also called for the tax cuts on Americans making more than $250,000 a year to once and for all expire, setting up what will surely be an election year showdown between himself and Republicans on a crucial economic issue.

House Republicans have already rejected Obama’s proposal as a tax hike.

The big question this time around is whether the president will stick to his guns. As the tax cuts were set to expire in late 2010, Obama eventually relented to Republicans and extended all of the tax cuts — including those for the very rich — for two more years. However, he said then that he would not extend the cuts for the wealthiest Americans the next time around.

— Posted by Tracy Bloom

First Read:

The announcement is rife with election year significance. Republicans have raised the specter of a tax increase that would spring into effect if the Bush tax cuts were allowed to expire at the end of this calendar year.

Though Obama’s proposal would preserve existing tax rates for all but the wealthiest American households, Republicans still derided it as a massive tax hike — especially on small business owners whose revenues are treated as personal income.

…Taxes have often been an effective political cudgel for the GOP to wield against Democrats in election years. Obama’s announcement on Monday was ostensibly intended to defuse the looming tax fight at the end of this year, though it’s unlikely that any legislation makes it to the president’s desk before Election Day.

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