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Posted at 06:25 PM ET, 08/01/2012

In election year gambit, GOP House extends Bush tax cuts

The Republican-led House of Representatives voted Wednesday to extend expiring George W. Bush-era tax cuts at all income levels for another year, a pre-election statement of the GOP’s unyielding opposition to raising taxes for any taxpayer.

Th 256 to 171 vote to preserve tax cuts first enacted during the Bush administration and renewed in 2010 since then fell largely along party lines, though 19 Democrats voted with Republicans to extend the tax cuts. One Republican was opposed.

It came after the House rejected a Democratic alternative, also largely on a partisan 170 to 257 vote, that would have preserve tax cuts for income up to $250,000 but allowed them to expire for the wealthy.

The House action stands in contrast to the Senate measure approved last week that would extend tax cuts only for the middle class.

Both parties said they were happy to go on record with their contrasting tax visions as the campaign season heats up.

President Obama supports allowing the tax cuts to expire for the wealthy and has indicated that he would veto any attempt to extend them at all income levels.

House Republicans argue that the current tax rates should be extended for another year and have proposed to spend the coming months reforming the tax system to end tax breaks and close loopholes, and use the revenue generated to push tax rates lower still. On Thursday, the House is scheduled to vote on a bill that would lay down principles for that tax reform effort.

Republicans will argue that raising taxes on anyone is a bad idea in a down economy, and they will note that hundreds of thousands could be impacted by allowing upper-income tax rates to rise.

“The choice is clear: You either want growth or you want more taxes,” said House Minority Leader Eric Cantor (R-Va.). “You either want to endow the folks who earn the money with the right to keep that money and grow this economy or you want to tax those people more and let Washington decide how it’s going to allocate that money.”

Democrats will counter that the wealthy should pay at the same rate they did during the Clinton administration to help pay down the deficit and that Republicans were holding tax relief for the middle class — 98 percent of taxpayers — hostage to their desire to keep taxes low for top income earners.

“Under the Republican plan, they have chosen millionaires over the middle class — a $160,000 tax cut for those wealthier Americans as compared to the $2,200 cut that we have proposed for middle-class Americans,” said House Minority Whip Steny Hoyer (D-Md.).

Extending the tax rates would mean retaining a marginal tax rate for top income earners of 35 percent, rather than allowing it to jump to 39.6 percent Jan. 1.

Neither party expects to resolve the issue until after the election, when they will begin negotiations in earnest about how to handle tax hikes set to hit virtually every taxpayer Jan. 1, as well as deep automatic spending cuts that are also scheduled to hit in January.

The combined effect of expiring tax cuts and the spending reductions could take an estimated $600 billion out of the nation’s economy.

Though both parties seemed to be spoiling for the tax fight, a new poll of swing state voters suggested that allowing taxes to increase on those making more than $250,000 remains popular.

According to a Quinnipiac University/ CBS News/New York Times swing state poll released Wednesday, 58 percent of voters in Florida favor the idea, while 37 percent oppose it. Voters in Ohio support the idea by 60 to 37 percent, while voters in Pennsylvania support it by 62 to 34 percent.

By  |  06:25 PM ET, 08/01/2012

 
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