CQ TODAY ONLINE NEWS
July 24, 2012 – 11:01 p.m.
Senate Procedural Vote to Mark Tax Divide
By Sam Goldfarb, CQ Staff
Lawmakers are nearing the end of the first phase of their fight over expiring tax cuts, having set the tone and the parameters of a debate that could dominate the campaign season and continue well after the fall elections.
After weeks of buildup, the Senate is set to vote Wednesday on a motion to proceed to a Democratic bill (
That vote will take place about a week before the House considers a Republican plan to continue the George W. Bush administration tax cuts on all income levels for another year. House Ways and Means Chairman
By late Tuesday, the only unanswered question was whether Senate Republicans would be able to offer their own tax cut extension (
Unhappy with an offer from Majority Leader
As Reid and Minority Leader
In one development, a conservative Democrat who was seen as a possible “no” vote on his party’s plan said he would support the one-year extension of current tax rates on income up to $200,000 for individual filers and $250,000 for joint filers.
In floor remarks, Sen.
“When considering these two proposals, I kept two priorities in mind: putting our fiscal house back in order and restoring fairness to the tax code,” Manchin said. “So while I would prefer a bipartisan, comprehensive solution, I will support the plan to keep taxes low on families that make less than $250,000.”
Manchin said his decision was made partly because the tax cut extension Reid introduced includes several tax breaks for low- and middle-income earners that are missing from the Republican bill.
Those tax breaks, including a college tuition tax credit and an expansion of the child credit, were originally included in the 2009 stimulus law (PL 111-5). Taken together, they are not cheap, costing an estimated $27.2 billion for just a one-year extension. But they have become a talking point for Democrats in recent days and forced Republicans to play defense.
Asked at a news conference why the tax breaks were not included in the Senate GOP bill, McConnell declined to answer.
“If that is the excuse to vote against a bill which would keep Americans from having their taxes increased, that does not sound like a very legitimate excuse to me,” Kyl said.
Senate Procedural Vote to Mark Tax Divide
Senate Finance ranking member
For their part, Republicans say there are elements missing from the Democrats’ bill, most notably language dealing with the estate tax, which will become much broader next year unless Congress takes preventive action.
“Under their proposal, and this is according to the Joint Tax Committee, at least 12 times more estates would be subject to the estate tax than is the case today,” Kyl said. “At least 20 times more farming estates would be subject to the estate tax. And at least nine times more small businesses would be subject to the estate tax than is the case today.”
Camp Introduces Legislation
Whatever happens in the Senate, Republicans will be able to set out completely their preferred tax policy in the House.
The bill introduced by Camp on Tuesday would extend through 2013 the Bush administration tax cuts, which are set to expire at the end of this year. It also would provide a two-year “patch” for the alternative minimum tax, preventing it from expanding its reach to millions of additional taxpayers in 2012 and 2013.
The existing tax cuts that would be extended include marginal rates that top out at 35 percent, marriage penalty relief, a $1,000 child tax credit and a 15 percent top rate on dividends and capital gains. The bill also would keep the estate tax at its 2011 and 2012 levels.
Camp’s office said that, based on an estimate from the JCT, the measure would prevent taxes from rising by $384 billion over 10 years.
As a companion to the measure, Camp and House Rules Chairman
Under that measure, a tax overhaul approved by the Ways and Means Committee would automatically be considered on the House floor if the Rules panel does not act on it within 15 days. In addition, senators would not be allowed to filibuster a motion to proceed to the overhaul legislation. However, senators would be allowed to filibuster other procedural motions and a final vote on the bill. And there would be no mechanism to force Ways and Means to report a bill in the first place.
Paul M. Krawzak and Emily Holden contributed to this story.