Democrats in House vote to extend Bush tax cuts for middle class only

The U.S. House of Representatives on Thursday passed legislation H.R. 4853, extending the Bush tax cuts for middle class Americans, but not for the highest earners. Tax rates for individuals earning more than $200,000 or couples earning more than $250,000 would return to 2001 levels. The bill is not expected to be approved by the Senate, where debate on the tax cuts and other tax provisions continues.

If Congress does not act on the Bush tax cuts by December 31, current tax rates will expire for everyone.

The House vote gave Democrats in the lame duck session an opportunity to demonstrate their support for middle class tax cuts and their opposition to tax cuts for the wealthy. Republicans will control the House after January 1.

Republicans had tried earlier in the day to offer their own bill, which would permanently extend all of the Bush tax cuts, but were prevented from this effort by a procedural vote.

Agreement on the Bush tax cuts is only one piece of complex tax legislation that must be completed by the end of the year. The current estate tax rates are also set to expire and the tax would revert to 2001 levels, and the annual extension of the Alternative Minimum Tax is up for renewal.

Tax rates on capital gains and dividend income are also scheduled to expire. Current capital gains and dividend rates were extended for the middle class only in the House bill.

The final vote was 234 to 188 in favor of the Democrat plan.  Three Republicans voted with the Democrats.  Twenty Democrats voted with the Republicans.
 


Already a member? log in here.

Editor's Choice

Upcoming CPE Webinars

Dec 3The materials discuss the concepts and principles in the AICPA’s new special purpose framework.
Dec 8Kristen Rampe will cover how to diffuse the tension in challenging situations in this one-hour webinar.
Dec 9A key component to improving your firm’s workflow efficiency while enhancing your profitability at the same time is how you leverage emerging technologies.
Dec 16Kristen Rampe will give tips on how to bring confidence into the room and build a valuable network.