The House of Representatives has voted to extend the Bush-era tax cuts for all incomes by a wide margin, responding to a tax cut passed by the Senate that was aimed more at the middle class.
The Republican-ruled House voted 256-171 for the extension, with 19 Democrats joining Republicans and one Republican - Rep. Tim Johnson of Illinois - voting against it. The current rates were signed into law by President George W. Bush in 2001 and 2003, and will expire on Jan. 1 without congressional action.
The House vote was a defiant answer to the Democratic-controlled Senate, which successfully voted 51-48 on July 25 to pass a White House-supported plan that would allow tax cuts for wealthier Americans to expire while extending them for families that earn less than $250,000. The House voted separately to reject that bill, 257-170.
President Barack Obama has vowed not to extend the tax cuts for top income-earners, but has consistently pushed to continue them for middle-class taxpayers. Accordingly, White House Press Secretary Jay Carney issued a statement slamming House Republicans for "shower(ing) millionaires and billionaires with a $1 trillion tax cut that will inevitably be paid for by gutting investments in critical programs needed to create jobs and strengthen the economy."
"At a time when we need to make tough choices to reduce the deficit, we can't afford another massive tax break for the wealthiest two percent of Americans. We've tried this approach, and it didn't grow the economy or strengthen the middle class. And we certainly can't afford to raise taxes on 25 million middle class families like the Republican plan would do," Carney said.
Wednesday's vote was dripping with election-year politics. Senate Majority Leader Harry Reid, D-Nev., had fired off a letter to House GOP leaders earlier in the week, urging them to pass the Senate-passed tax cut bill and vowing that anything else won't pass the upper chamber.
But House leaders held firm, describing the Senate bill as a tax increase because the top rates would climb. Politics generally overtook the situation over the past several months, with Republicans accusing Democrats of wanting to raise taxes and Democrats casting Republicans as patrons of the rich.
Significantly, House leaders have not taken any steps to create a conference committee to resolve the differences between the House-passed bill and the Senate-passed bill - a sign that no serious action on the tax cuts is expected before the November elections.
Without an agreement before Jan. 1, tax rates will increase on income, capital gains, dividends and estates. Income tax rates would climb from 35 percent to 39.6 percent, while the top rate on capital gains would increase from 15 percent to 23.8 percent.
by RTT Staff Writer
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