PROVIDENCE, R.I. -- President Obama's administration says 400,000 Rhode Island families will see their federal income taxes increase if the U.S. House of Representatives fails to extend tax cuts set to expire at the end of the year.
Obama's National Economic Council estimates that would result in a $700 million drop in consumer spending in Rhode Island, as middle class families would have less money in their pockets.
The office said a family of four earning $82,100 -- Rhode Island's median income for that family size -- could see its income taxes rise by $2,200.
An "upper middle class" family with one child and earning $130,000 would see an increase of $4,040, it said. And a single mother with two children and earning $24,000 a year would see an increase of $1,670, the office said.
Obama's calculations focus largely on what happens when the cuts expire, and tax benefits for having children and being married are reduced or eliminated and the 10 percent federal tax bracket is merged with the 15 percent bracket.
Obama is calling for Congress to continue the tax cuts for families with incomes of less than $250,000 a year and to preserve the 10 percent tax bracket. In some cases, he is also proposing expanding or increasing tax deductions.