US Senate is divided in row over tax breaks

US Democrats do not have the votes in the Senate to pass their proposal to extend tax breaks for all but the richest Americans, Senate majority whip Dick Durbin said yesterday after the US lower house left the door open for a vote on the proposals to be delayed until after the mid-term elections.

Under the Democrat’s proposals, a tax break introduced by the previous Bush administration would be extended to individuals earning up to $200,000 (£126,000) and couples who earn $250,000 jointly. Republicans want the tax break extended to all citizens. Those affected by the Democratic proposals represent the top two per cent of earners in the US. The tax breaks are due to end on 31 December.

Republicans, and a few Democrats, say the tax reductions should apply to all as raising taxes in an atmosphere of high unemployment and slow growth risks slowing recovery.

There are also disagreements over the timing of the vote after the House of Representatives left it open to delay beyond 2 November, the date of midterm elections in which the Democrats expect to fare badly in.

“We know we don’t have the 60 votes for our position,” Durbin said yesterday.