House Votes to Extend Bush-era Tax Cuts - Except for Highest Earners

CBS/IStockphoto

Updated 4:57 p.m. Eastern Time

The Democrat-led House of Representatives has voted to extend the Bush-era tax cuts for families making $250,000 or less - but not on incomes above that threshold, as Republicans have demanded.

The vote is likely largely symbolic, since the bill is unlikely to get the 60 votes it needs to break a GOP filibuster in the Senate.

The Obama administration and Congressional leaders are now in negotiations on crafting a compromise between the White House position that the cuts not be extended for incomes above the $250,000 threshold for families (or $200,000 for individuals) and the Republican position that they be extended for all Americans.

Most political observers expect Democrats to agree to extend the tax cuts for all Americans at least for a few years, possibly in exchange for GOP votes on Democratic priorities like ratifying the START nuclear treaty with Russia or extending unemployment insurance, which expired on Tuesday.

The White House says there is no deal imminent, however.

"The President continues to believe that extending middle class tax cuts is the most important thing we can do for our economy right now and he applauds the House for passing a permanent extension," press secretary Robert Gibbs said in a statement not long after the vote. "But, because Republicans have made it clear that they won't pass a middle class extension without also extending tax cuts for the wealthy, the President has asked Director Lew and Secretary Geithner to work with Congress to find a way forward. Those discussions started just yesterday and are continuing this afternoon. The talks are ongoing and productive, but any reports that we are near a deal in the tax cuts negotiations are inaccurate and premature."

Before the vote, House Minority Leader John Boehner called the effort "chicken crap" that reflected "political games" on the part of Democrats. Boehner will be House speaker when Republicans take over the chamber in January.

The final vote was 234-188, largely along party lines, with 12 members not voting.

President Obama dispatched Treasury Secretary Tim Geithner and the Director of the Office of Management and Budget, to oversee negotiations on finding common ground on the issue earlier this week, following a meeting with Congressional leaders from both parties.

If the House/Obama plan were to be passed, according to the Tax Policy Center, a married couple with no children making $415,000 per year could expect to pay about $7,000 per year more in taxes. Americans making more than $373,650 would see their tax rate increase from 35 percent to 39.6 percent. (You can calculate how the various plans might affect you individually here.)

The Treasury Department says the cost of making the cuts permanent for everyone -- the GOP plan -- is $3.7 trillion over a decade. The House plan would cost an estimated $3 trillion over ten years.

MONEYWATCH: Are You Middle Class?

---

Brian Montopoli is senior political reporter for CBSNews.com. You can read more of his posts here. Follow Hotsheet on Facebook and Twitter.

[jasonmcj]

funny how so many ignoramuses keep parroting the idea that lower taxes stumulate the economy and yet all the evidence is against you.

[crazyname]

big deal. it is totally political, and hopefully the senate will not pass it on. Many of them are up for relection in 2 years, and we won't forget! Like the deficit commission, all of this was in the works before the election. Democrats last stand! and the media is doing a CYA for the dems.

[nearl451]

It is not fiscally repsonsible to carry on two wars and continue to give tax breaks to refuse to for pay for them. That's not budget balancing, that is paying what is spent and due.

All this talk of fiscal resposibility was a farce. Cutting costs is necessary, but not easy nor large cuts wise in a stagnant economy.

[nearl451]

Looking forward to many more "Chicken Poop" moments inthenext two years. It ought to be entertaining tyo watch this guy Boehner cry or wax apoplectic every time a piece of legislation passes the House.

LOL.

[RobAla]

Some people are in favor of taxes Americans who make more than they do, for 2 main reasons:
1) Some people are too ignorant of economics to understand that more heavily taxing the more wealthy Americans, would redirect money out of the struggling economy and into the bloated belly of Washington. The people with more money have money to buy things, things that businesses sell - the same businesses that hire us. Taxing anyone more during a recession is idiotic - it will make unemployment even worse than it is. That is why many Democrats are beginning to back away from the idea of raising taxes.

2) Some people are envious, jealous, petty, and childish in how they view people who make more than they do. Some people think that if they don't have a certain amount of money, then no one else should have it. I know those people. When I was young man, living in a very poor neighborhood, one elderly couple purchased a new car for the first time in their life. Within a month, some jealous selfish jerk keyed the car. If they couldn't have a new car, then no one else should have one. This is sickening.

Some people are all about taxing someone else (the so called rich), but would scream like a little girl being chased by bees if the government came after their money. I am all about paying for the wars, Social Security, Medicare, Medicaid - by cutting $billions of crap programs that the federal government runs - not by sucking more hard earned money out of Americans. Consider the federal study of the viscosity of ketchup (60 Minutes did a show on that one), and a host of other worthless programs. How about the study of how cow farts will cause the end of the world through global warming? I am about the federal government stopping the automatic built in expansion of federal programs, whether the program are worthwhile or not. We have all had to tighten our belts while the federal government has fattened itself over the past few years. I am ready for the federal government to tighten its own bloated belt.

I don't make anything close to $250,000, but I understand that without the more wealthy people spending money - more jobs will go away. If the government takes their discretionary funds, they won't have it to buy things - things that businesses sell - you know, those businesses that hire people.

People need to stop the hatred of those making more than we do. Some people have the mentality that if they don't have a certain amount of money, no one else should have it. It is none of my business as to how much money someone else has - it doesn't impact my life at all. Good for them. There are those in politics who have made their fortunes by pitting one group of Americans against another. Enough of this petty and hateful crap!

[velma179]

Rob...

I make a lot of money. I do not spend more or less depending on what taxes I pay.

But, I am not a lover of money, I just have plenty. It started before I was born... if my parents passed away in 55% inheritance tax situation, I would still be rich. The fact they put the money into a trust means something... something people that have no idea what the wealthy do with wealth would never understand.

Please stop speaking for anyone but yourself. I know some greedy jerks that have millions in the bank and some who have five hundred bucks. Money is NOT the thing that defines us in America. What about community, commitment to the values of our society -- where equality is worth more than equity. Damn, we are better than "money, money, money... who has it? Who wants it? Where is mine?"

What about.... who did you embrace today? Who did you show kindness to today? Did you give someone something, maybe even at your own expense? Are you sleeping soundly tonight knowing you are living in the golden rule?

If I knew you and I could help you I would. I disagree with your politics, but you are a human and an American just like me... why would I not?

Let's try to get along here in the trenches.... maybe that will help our leaders in the government to follow suit and do the right thing. I HOPE so.

[nearl451]

Velma,you realize that you are wasting your words on this fellow, don't you. He is not capable of reason or any owning up of repsonsibility to pay for anything.

For this type it is always the other fellow's problem to pay taxes and for all to fend for themselves. It is social Darwinism; not fiscal repsonsibility that he really wants.

Aside from budget balancing, there are 9 years worth of war debt under the bridge to pay for and no plan in sight. Heck we just STARTED accounting for that cost on the books.

[renee1955]

That Boehner guy is due for a stiff drink and a box of puffs.

[ohyes1234]

Rich people deserve to be rich. They have convienced at least some average people that if they you tax them you are communist. It takes a lot of smart to do that. Rich people's income rose average of 27% in the past 10 years. Middle class income rose only 16%. I do not think they worked any harder than we did. They just paid milllions to the Republicans to get elected and pass laws to protect the rich people. Last by not least rich people haven't been sending their kids to wars either.

[retm-w]

Last I checked poor and middle class kids don't have to go to wars either. There has been no draft since 1973, it's all volunteer. Give some proof to your statement that rich kids aren't serving in the military or going to war.

[velma179]

Very few wealthy families have children in the military. Why? One, they need their progeny here and going into the family BUSINESS. They do not want their kids put in harms way and since it is a voluntary military, they can keep them out... even the kids that feel a sense of duty can be held back with promises of financial security.

More middle to lower income young people enlist because of the benefits. The Military not only assures a steady paycheck, but excellent retirement benefits and lifetime health care coverage.

Sure, many go to war and nothing can ever take that courage away from those who serve. But more enlisted service members never actually engage in combat, more than those who do.

I sure wish people would research and find the NON POLITICAL truth. It is available.

[Stevenapoli7]

Some main problems are too much spending and too many promises. The successful already pay more. Just cause you can tax the citizens, doen't mean you should. With Fed and State taxes hovering near 50% combined, that's a barrier that should not be broken. I don't care if you're Shaq, no one should hjave to give half of what they earn to the government.

[velma179]

Anyone who pays 50% of their income in taxes has a very bad accountant.

I make over $250,000 (quite a bit actually) and I live in California -- just like Shaq -- which has pretty high state tax rates in comparison to other states (some, do not have state income taxes). I have never paid 50% of my income in federal and state tax combined.

That is frankly an uninformed assumption. Only a person who has no real, personal idea of how the highest income Americans pay taxes would make it. I hope you are very successful and one day understand that I am telling the truth. I mean that. I love the American dream.

The government does spend the tax money collected. This is Constitutionally mandated. It is a false assumption that tax money is "my money".... no, it is not. Not if you choose to live in the USA. Our founders and following them, others... set up a system that is supposed to work for the common good.

The politicians -- both parties -- are so beholden to special interests, they often forget the common good and work for the interests of only the "people who can keep me in this job".

You need to stop thinking that any of these elected people can promise you anything. They can not. They are not kings, queens or gods. They will tell you what they intend to do --- listen carefully, certain "buzz" words should make you search for the truth. Currently among those words -- the most erroneously used is "jobs". The only thing that will keep this country strong is an informed electorate.

Spending is not wrong of itself. However, we should pay attention to WHAT our collective money is spent on. Honestly, do you think I should get an additional $10,000 to $20,000 next year (an amount I could easily spend on one bracelet...) or do you think a thousand people that are suffering in the cold without food should get a meal?

Ask yourself. Please. I wish you well.

[the74blaster]

by velma179 December 2, 2010 8:27 PM EST

Nice Post! I am not in that income bracket, but we have to wise up as an electorate.

Its a sad day when people start relying on political ads to decide who they should vote for.

I suppose California must be running out of redwoods for all the enlarged noses for puppets we elected last month!

Have a good holiday season and best wishes for a happy and health new year!

[RobAla]

These same Democrats had all year to cast this vote, but they didn't because they were afraid of consequences from voters. They waited after the election to do this, just as a snitty political parting shot at incoming Republican representatives. In one breath they call out for bipartisanship, and with the other breath they do this. It is petty, and ridiculous.

[nearl451]

Really cowardess on your part, actually. Willing to carp about taxes, but not willing to pay for the wars you supported. Jerk.

[velma179]

The Democrats haven't been running their mouths for "bi-partisanship" -- that is a tactic of the minority. They might do that in the HOuse next year, we'll see...


Are you nuts? If the Democrats had cast this vote BEFORE the election, they would have held MORE seats, not less. The Republicans just voted AGAINST tax cuts for those making under $250,000!!!

But you do know one thing, two actually -- "petty and ridiculous". They ooze from your posts!

[dqthach]

For the unemployed people could careless about tax break, Obama should have used the Wall Street & auto bailout funds to extend unemployment benefits for another years. What ever happen to the bailout money that GM paid back to the government before it's stock went IPO? And some big banks also paid back government with interests on those bailout funds. Republicans want Democrats to extend unemployment benefits if they can find money somewhere without increase the benefits. Well people, somebody should wake up Obama and Congress about unused bailout funds for Wall Street and auto industry with returning funds are more than enough to support unemployed folks.

[MB-1234]

Amazing - the Bush-ear tax cuts were put in place with a SUNSET Clause by a REPUBLICAN President, a REPUBLICAN House and a REPUBLICAN Senate. The reason for the Sunset Clause was b/c there was a SURPLUS when Bush took the presidency. Those REPUBLICANS knew it couldn't last forever b/c it WASN'T PAID FOR, that's why the Sunset Clause.

Keep in mind - these tax cuts have BEEN IN PLACE FOR NINE YEARS--- the richest 2% have gotten tons of cash back and more - that's part of how we moved from a SURPLUS in 2001 to the DEFICIT we have now.

Now these jokers keep saying how these tax cuts should be made permanent and add BILLIONS to the DEFICIT. Keep in mind HEDGE FUND MANAGERS with $30M SECOND homes and gigantic companies like Bectel fall under their definition of "small business", which they throw around like every Mom & Pop business is going to get slammed by this. I own a small business, these tax cuts will not affect me or other people with small business's who don't PERSONALLY make more than $250K/yr. For anyone who thinks the richest 2% of Americans actually need more money - I have a bridge I'd like to sell you.

[velma179]

Right on.

Don't you just cringe when you hear the spin... "job killing tax increases", my fine round seat.

And the latest "we want to treat all American tax payers equally". Wealth redistribution goes up as well as down.

I am waiting for the Republicans to start their spending cuts... ya' think they will start with unnecessary subsidies to their buddies in oil, timber, coal, insurance etc? Yeah, right. Then THAT will be "necessary for job creation".

If the USA does not have SEVEN MILLION new jobs at the end of 2011 -- do you think the Republicans will still have a "spinner" that works? No way.

[velma179]

Alan...

You really don't mush care for the US Constitution, do you?


You would rather have the Constitution of Alan, me and mine --- I guess. Your liberty? Oh really.... well buddy you missed the whole point of our founding documents. It is about OUR liberty.

Hence, the taxes levied are legal and if you want to be an American, you need to understand that percentage is NOT your money, it is our money. Hey, it is OUR Military, OUR roads, Our infrastructure.... OUR country!