House approves temporary extension of 2001 and 2003 income tax rates for all individuals; expected to approve expedited process for 2013 tax reform legislation

Washington National Tax Services

The House on August 1 voted 256 to 171 to approve the "Job Protection and Recession Prevention Act of 2012" (H.R. 8), which would extend for one year 2001 and 2003 tax provisions for all taxpayers. The House will vote August 2 on a bill (H.R. 6169) to establish an expedited process for Congressional consideration of tax reform in 2013. If H.R. 6169 is approved as expected, the tax reform process provisions will be incorporated into H.R. 8 under a rule approved by the House.

The White House has issued statements indicating that President Obama would veto H.R. 8 and the House proposal for an expedited tax reform process. The House rejected by a vote of 170 to 257 a proposal by House Ways and Means Ranking Member Sander Levin (D-MI) to extend current individual tax rates only for individuals with adjusted gross income (AGI) below $200,000, and joint filers with AGI below $250,000, as called for by President Obama.

It remains uncertain how Congress may resolve differences between the House and Senate on proposals to address the scheduled expiration after 2012 of current individual tax rates. The Senate on July 25 voted 51 to 48 to approve the "Middle Class Tax Cut Act of 2012" (S. 3412), which generally would extend for one year current individual tax rates for individuals with AGI below $200,000, and joint filers with AGI below $250,000. The Senate rejected by a vote of 45 to 54 a proposal by Senate Minority Leader Mitch McConnell (R-KY) and Finance Ranking Member Orrin Hatch (R-UT) to extend 2001 and 2003 tax provisions temporarily for all taxpayers.

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