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Obama and tax cuts: How far toward GOP will he go?

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Yonhap News Agency/AP Photo

(Read caption) U.S. President Barack Obama gestures during a closing press conference at the G20 Summit in Seoul, South Korea Friday, Nov. 12.

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President Obama appears to be open to working with Republicans to extend Bush-era tax cuts. That’s what he indicated Friday at a press conference in Asia, where he’s traveling. Mr. Obama reiterated that he plans to meet with congressional leaders at the White House next week and that item No. 1 on the agenda is the looming expiration of the lower Bush tax rates.

“There may be a whole host of ways to compromise around those issues,” said the US president.

But what is Obama’s bottom line? How far toward the GOP’s position will he go?

Here’s the state of play at the moment: Before the election, Obama and many other Democrats campaigned on extending rate reductions only for the middle class, defined as those making less than $250,000 a year. That includes some 98 percent of taxpayers, according to Obama.

Republicans want the lower rates extended for everyone, including those making more than $250,000 a year. The wealthy include many small-business owners, who create most of America’s new jobs, according to the GOP.

On Thursday, Washington was atweetering over a Huffington Post report that suggested the administration was willing to cede this dispute to Republicans due to the GOP’s midterm election gains.

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