The United States House of Representatives took the opposite action on tax cuts on Wednesday, rejecting a Democratic proposal championed by President Barack Obama to extend lower tax rates for middle-income Americans, and then passing a Republican plan to maintain the lower rates for a year. The vote extended a congressional stalemate over the Bush tax cuts from 2001 and 2003 that has come to symbolize legislative inaction in Washington.
Republicans in favor of minimizing government oppose any higher taxes, arguing the Democratic plan of allowing rates to increase on higher income Americans will stunt economic growth. Democrats assert Republicans are holding tax breaks hostage for the middle class, including 97 percent of small business owners, in order to keep lower tax rates for 2 percent of American taxpayers earning in excess of the $250,000 threshold. Both parties agree on extending the lower tax rates for middle income Americans, however, Democrats say Republicans are preventing that from happening out of allegiance to a rigid opposition of any kind of increase on even the wealthiest Americans.