The US Treasury Secretary says the government will let tax cuts for wealthy Americans expire as scheduled at the end of the year, but extend the cuts for the middle class.
In his speech in Washington on Wednesday, Timothy Geithner said extending the tax cuts for the top 2 percent of Americans would be a mistake. Geithner explained that such cuts would add significantly to the already massive fiscal deficit.
However, he said extending tax cuts to the middle class would not only help Americans suffering in the wake of the financial crisis, but also lay the foundation for a continued economic recovery.
The tax cuts were introduced by the previous administration of George W. Bush.
Some Democrat and Republican lawmakers are urging that tax cuts for the rich should also be extended, in order to keep personal consumption afloat.