By LISA MASCARO
Tribune Washington Bureau (MCT)
WASHINGTON, D.C. — House Republicans voted to keep tax rates at their current level through next year, using one of their last votes before recessing for most of August to approve politically symbolic legislation that President Barack Obama has vowed to veto.
The vote Wednesday was intended to showcase the contrast between the GOP view on taxes and the one pushed by Obama and congressional Democrats. The Senate, with its Democratic majority, already has approved a measure that would allow income tax rates to rise on earnings above $200,000 for individuals and $250,000 for couples – a move that would affect the top 2 percent of earners.
With no compromise in sight, the divide between the parties on taxes is expected to fuel the fall campaigns. The current tax rates, first approved under the George W. Bush administration, expire at the end of the year. Taxes will rise automatically if Congress fails to find agreement by Dec. 31.
“We stand for no tax increases,” said freshman Rep. Tom Reed, R-N.Y. The Republican plan would, however, raise taxes for millions of low-income households by ending tax breaks for families with children that were passed in 2009 as part of the economic stimulus legislation.
Democrats, emboldened by polls showing most Americans favor their side of the argument, argued that Republicans should not hold tax breaks for most Americans hostage for a “bonus” break for upper-income earners.
“We all admire financial success, but when we give away trillions in tax cuts we cannot afford to those who need them the least, it’s the middle class who has to make up the difference,” said Rep. Xavier Becerra of California, a top Democrat in the House.
The House voted 256-171, with 19 Democrats from mostly conservative districts or tough election battles crossing party lines to join Republicans. One Republican voted no.

Under the proposal approved last week by the Senate, top income tax rates would rise, from 33 percent and 35 percent now to 35 percent and 39.6 percent. Rates for capital gains and dividends would also go up, to 20 percent, and the estate tax would revert to its 2001 level of 55 percent, up from 35 percent today. Democrats would also continue the 2009 tax breaks, which include credits for child care and college costs, for another year.

The House bill would keep the 33 percent and 35 percent rates in place, keep the capital gains and dividend rates at 15 percent and eliminate the additional tax credits approved in the 2009 Obama bill.

The White House estimates that the Republican plan would cost $1 trillion more over the decade than the Democratic plan, prompting the president’s veto threat over the GOP approach.

Republicans said they were fighting to protect the nation’s small business owners, most of whom file their profits as personal income under the tax code. Analysts have said less than 3 percent of those filers make enough to be snared by the tax hike.