The U.S. House voted yesterday to extend for one year all the tax rates established by the Bush tax cuts in 2001 and 2003. Without Congressional action, those tax cuts will expire at the end of 2012. Once again, three-term Representative Dave Loebsack (IA-02) and eight-term Representative Leonard Boswell (IA-03) were among a small group of Democrats to vote for a GOP bill.

Pete Kasperowicz reported for The Hill,

The Job Protection and Recession Prevention Act was approved in a 256-171 vote that saw 19 Democrats vote with Republicans, highlighting division in the Democratic party over taxes. Only one Republican, Rep. Tim Johnson (Ill.), voted no. […]

House Republicans allowed Democrats a vote on a proposal similar to the one the Senate approved, and predictably, it failed in a 170-257 vote, with 19 Democrats voting against their party. During debate, Republicans said the Democratic alternative would raise taxes on about one million small business owners with incomes at or above those levels.

They also noted that less than two years ago, many Democrats agreed to extend all the Bush-era tax levels, citing the harm any tax hike might do to the struggling economy.

“Two years ago, the president said we shouldn’t raise taxes in this time of a slow economy. I agreed with the president,” House Speaker John Boehner (R-Ohio) said during debate.

Bleeding Heartland noted in 2010 how damaging it was for president Barack Obama and other Democrats including Loebsack to validate Republican talking points suggesting that the Bush tax cuts for the wealthy had sparked economic growth.

The roll call vote on the House Republican plan shows Loebsack and Boswell among the 19 Democrats who voted with a nearly-unanimous GOP caucus. Iowans Tom Latham (IA-04) and Steve King (IA-05) also voted yes, while Democrat Bruce Braley (IA-01) voted no.

Here is the roll call on the Democratic proposal, which echoed the bill the U.S. Senate approved last week. That plan would extend most of the Bush tax cuts, but individuals would pay higher taxes on earned income above $200,000, and families would pay higher taxes on earned income above $250,000. Interestingly, Loebsack and Boswell joined Braley and most of the Democratic caucus to support this plan. Most of the 19 Democrats who voted for the GOP tax cut extension also voted against their party’s plan.

As happened during recent House votes on domestic oil drilling, Loebsack and Boswell supported their own party’s legislation as well as the Republican approach to the issue.

Congress will not resolve the tax cut extension debate until after the November election. Russell Berman commented in his report for The Hill,

Yet, in a sign that Wednesday’s vote was more about message than substance, the House made no move to launch a formal House-Senate conference committee to resolve the differences between the bills, and there is little expectation that serious negotiations will take place before the election. The [current tax] rates expire at the end of the year.

I remain convinced that no matter what happens in the election, the president and Senate Democrats will cave on this issue, approving another extension of the Bush tax cuts for all income levels.

Boswell’s office didn’t release any statement on yesterday’s tax vote. Loebsack’s office tried to deflect attention from this vote with a press release about a bill he introduced to help the middle class.

Loebsack Introduces Middle Class and Small Business Tax Relief Act

Washington, D.C. – Congressman Dave Loebsack released the following statement today after introducing the Middle Class and Small Business Tax Relief Act of 2012.

“I am fighting for commonsense, fiscally responsible tax cuts for middle and low income families, small businesses, and family farms.  That’s why I’ve introduced an initiative to allow them to keep their tax cut.  Growing up, my family wouldn’t have been able to afford to put food on the table if taxes on working families went up.  I stand ready to work with anyone who will support commonsense compromise to get these tax cuts done.

“Washington is broken, and today is just more evidence of that.  There are too many people in Congress interested only in political ideology rather than actually helping Iowa families.  Last year the economy was taken to the brink by a group in Washington that is more concerned about rigid ideology than people’s jobs. That is simply not me.  I am not willing to do that to Iowa families. Washington needs to learn how to compromise.  I have introduced commonsense legislation and am willing to work with anyone who is interested in putting the middle class, small businesses, and family farms ahead of politics.  I always have and always will fight for Iowans.”

Loebsack’s Middle Class and Small Business Tax Relief Act of 2012 extends tax cuts for married joint filers making up to $250,000 and individual filers making up to $200,000.  Additionally, the bill:

·         Includes an exemption for small business and family farm income;

·         Extends for one-year the American Opportunity Tax Credit, the Child Tax Credit, the Earned Income Tax Credit, and current capital gains and dividend rates;

·         Includes a one-year patch for the Alternative Minimum Tax;

·         Extends for one year the current Estate Tax rates.

If that’s Loebsack’s preferred tax plan, he shouldn’t be voting for the Republican approach to this problem. Apparently he is afraid to give his GOP opponent John Archer grounds to attack him on this issue.

Showing the cynicism I’ve come to expect, the Democratic Congressional Campaign Committee put out press releases on August 1 bashing Latham and King for backing tax cuts for millionaires. Here’s an excerpt from the Latham version of this statement, which hit my inbox before the House votes on the tax-cut plans:

New Report: Congressman Latham To Give 192 Millionaires in his District Another Tax Break

Congressman Tom Latham (IA-03) is set to vote for another tax break for the 192 millionaires in his Congressional district at the expense of the middle class families according to a new Ways and Means Committee Report. The report found that Congressman Latham’s plan would give an average $160,000 tax break to 192 millionaires of the 267,982 households in his district.  While Congressman Latham holds middle class families hostage in order to pass more tax cuts for millionaires, he has voted to drastically cut Medicare and raise costs for seniors by nearly $6,400.

“Congressman Latham is about to do it again: Vote for another tax break for millionaires at the expense of the middle class and seniors,” said Jesse Ferguson of the Democratic Congressional Campaign Committee. “It’s outrageous that Congressman Latham is holding middle class tax cuts hostage in order to pass a $160,000 tax break for 192 millionaires in his district. Congressman Latham has already voted to drastically cut Medicare and raise costs for seniors and now he is about to reward millionaire campaign contributors with another tax break.”

Background

House Republicans Set to Vote to Extend Tax Cuts for Ultra Wealthy the Week of July 30th. “The vote will be on extending the Bush rates for another year, and would come just before lawmakers leave for the August recess. The planned vote gives House Republicans a chance to show their opposition to President Obama’s proposal only to extend current tax levels for families making less than $250,000 a year.” [The Hill, 7/12/12]

Latham is Boswell’s opponent in the redrawn IA-03. I guess the DCCC doesn’t mind Boswell’s vote “for another tax break for the 192 millionaires in his Congressional district.”

King’s office released this statement on August 1.

King Votes to Stop Largest Tax Increase in History

“Today, I voted to prevent the largest tax increase in American history, which is scheduled to occur beginning in 2013,” said King. “This tax increase will hit all Americans. The lowest income tax rate will jump by half, from 10% to 15%. It will also raise taxes on the 95% of small businesses that pay taxes through the individual tax code.”

“Importantly, the bill I supported today will also prevent the Death Tax from skyrocketing on January 1st. It is diabolical to put individuals and families in the precarious position of having to make life and death decisions with a massive increase in the death tax looming at the end of the year.”

I will update this post if I see reaction from King’s Democratic challenger, Christie Vilsack.

UPDATE: For a more detailed case against extending the Bush tax cuts for the highest income levels, I recommend this piece by Chye-Ching Huang and Nathaniel Frentz for the Center on Budget and Policy Priorities.

Americans for Tax Fairness, Citizens for Tax Justice, and the National Women’s Law Center collaborated on a new report released this week: Time to Pay Their Fair Share: Iowa Can’t Afford to Extend the Bush-era Tax Cuts for the Wealthy Few.

SECOND UPDATE: Loebsack responded to my request for comment on these votes.

“Nothing that was voted on yesterday will ever become law and everyone knows it was political theater.  That process has gotten us nowhere and will never get us anywhere.  I am done with drawing symbolic, political lines in the sand.  I am proud to be one of only two people in all of Congress who worked to find where we can agree instead of highlighting where we disagree.   I am hopeful this unique position will allow me to begin a discussion of the possible rather than the typical political debate.

“Neither bill was perfect.  The Republican bill failed to extend critical tax cuts for hard working families and is too costly.  The Democratic bill didn’t give lower income families the certainty they need by permanently extending financial assistance for the lowest tax brackets.  And worst of all, neither side is looking for common ground.

“That is why I introduced commonsense legislation to protect middle class families, small businesses and family farms.  Washington needs to learn how to compromise.  I stand ready to work with anyone who will set politics aside to give middle class families the financial break they need and deserve.”