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Republicans block Obama tax plan

04 December 2010 21:21 (UTC +04:00)

Baku-APA.The US Senate has rejected President Obama’s proposed tax plan which would extend the Bush-era tax breaks only for the lower- and middle-class families, APA reports quoting Press TV.

The failure of Congress to renew the measures, against tax breaks which expire on December 31 this year, will raise income taxes for the lowest earners from 10 percent to 15 and for the highest ones from 35 percent to 39.6 starting in 2011.

The bill fell short by seven votes to reach the 60 votes required to pass in the Senate on Saturday. Not one Republican senator backed the proposal, and even a few Democrats voted against it, Reuters reported.

Congress also failed to extend aid for hundreds of thousands of long-term unemployed Americans, which began to expire this week.

Obama had hoped to end the Bush-era breaks on incomes above USD 250,000 a year for couples and USD 200,000 a year for individuals.

â€œYou don’t raise taxes if your ultimate goal, if the main thing is to create jobs,â€ Senator John Thune (R-SD), who voted against the bill, was quoted by The New York Times as saying.

Vice President Joe Biden said that Congress’s move "will wind up costing us hundreds of thousands of more jobs."

The Senate also rejected an alternative proposal which would have raised the tax break threshold to USD 1 million.

â€œIt seems to me that about the best way to reduce the deficit is not to give USD 300 billion of tax breaks to the 315,000 Americans whose income is over a million dollars,â€ New York Senator Charles E. Schumer said, who proposed the bill.

Republicans won a majority in the House and picked up six seats in the Senate in the recent midterm elections.

Obama’s top economic advisers are discussing a deal with key lawmakers to renew the lower tax rates for everyone, including America’s wealthiest individuals for one to three years, Reuters reported.