This vote was on passage of a Democratic bill that would extend the so-called “Bush tax cuts” on the first $200,000 of a worker’s income.
Democrats brought the bill up for consideration as Congress debated the “fiscal cliff” the nation could fact if the Bush tax cuts, first passed during President George W. Bush’s first term, were allowed to expire at the end of the year. The Democratic bill would extend the tax cuts only for the first $200,000 that a worker makes in a year, or the first $250,000 for a couple. Income above that amount would be subject to higher tax rates.
Democrats argued that the bill represented a fiscally responsible approach that would provide benefits for all taxpayers while reducing the federal budget deficit. They argued that the higher tax rate paid by the wealthiest Americans would equal the rate paid during the 1990s, a time of strong economic growth.
“One of the key facts we have observed, now for more than a decade, is that these Bush tax cuts have been very costly. They have been a primary driver of this deficit,” Sen. Jack Reed (D-RI) said. “With this proposal, we are beginning to try to reverse that trend in a principled way. The wealthiest, those who enjoy the greatest economic privilege in the country, should shoulder some of the responsibility, and should shoulder some of the effort in order to help us begin to repair the deficit, which has grown as a result of these massively costly and ineffective tax breaks the wealthiest have enjoyed since 2001.”
Opponents of the bill argued that tax rates should not be allowed to rise for any taxpayers, including wealthy Americans, at a time when the economy was still struggling to pick up steam. They accused Democrats of promoting the bill as a way to bolster the reelection campaign of President Obama, who supported the Democratic plan.
“Pursuit of this tax hike strategy is clearly being instigated by the president's reelection efforts,” Sen. Orrin Hatch (R-UT) said. “From a fiscal and economic perspective, the president's signature proposal threatens serious damage to our already fragile economy. The president's tax increases on those he deems ‘the rich’ in fact represent a massive tax hike on the small businesses that are necessary for economic and job growth.”
The Senate approved the Democratic bill by a vote of 51-48. Voting “yea” were 51 Democrats. Voting “nay” were 46 Republicans and 2 Democrats. As a result, the Senate approved legislation to extend the so-called “Bush tax cuts” on the first $200,000 of a worker’s income. However, to become law, the House of Representatives would first need to pass identical legislation. Because the Constitution requires tax laws to originate in the House, the Senate would then have to pass the House’s bill. It would then have to be signed by the president.