Battle Lines Drawn on Bush-Era Tax Cuts

Here’s one thing most Republicans and Democrats can agree on: Congress should act to keep taxes from going up for the average American when the Bush-era tax cuts expire at the end of the year.

Particularly in an election year, however, coming to agreement to do so is much easier said than done.

On Wednesday, the Democrat-led Senate plans to hold a procedural vote to start considering a $250 billion Democratic bill that would extend the tax cuts for individuals making less than $200,000 per year and couples making $250,000 per year. The tax cuts on income above those levels would be allowed to expire, which would mean increased taxes on 2.5 million of the nation’s wealthiest households. (The highest rates would increase from 33 percent to 36 percent and 35 percent to 39.6 percent.) The Democratic plan would also increase the estate tax, which is now 35 percent on estates over $5 million per person, to 55 percent on estates over $1 million per person. It would also increase the top capital gains tax rate and limit itemized tax deductions.

The Democratic plan, which is similar though not identical to President Obama’s proposal, needs 60 votes to proceed. If it gets those votes, Republicans plan to offer their alternative tax plan as an amendment. The $405 billion GOP plan would extend the tax cuts for everyone, including the wealthiest American, while (unlike the Democratic plan) allowing certain tax breaks to expire for millions of the poorest Americans. Republicans maintain that those tax breaks, which benefit low income college students and recipients of the earned income tax credit and Child Tax Credit, were always meant to be temporary.

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Posted in 2012 Election, Economics, Government, Politics, Taxes Tagged with: , , , , ,
3 comments on “Battle Lines Drawn on Bush-Era Tax Cuts
  1. ezekiel22 says:

    This is a serious smokescreen. The RINOS in Congress know this will get nowhere. They know they are handing the democrats a class warfare issue in black and white to them during an election year for pete’s sakes. The dems will simply state that the rino version just takes food and clothing away from those that can least afford it by eliminating the EIC. I have seen them do it before and win. Then there is the “tax cut” for the rich that we all hear ad naseum. This iis not a serious bill. It is a gift to the democrats.

  2. farmist says:

    I object to the headline of this article – it plays into the rhetoric of the left. These are not tax-CUTS, they are established tax RATES that have been in effect for over 10 years now.

  3. Don says:

    Reid must go along with several others and taxes must remain the same or less. If the democrats passed their version of a bill, you know they would not include and senator or congress person.