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House votes to keep tax cuts for investors

WASHINGTON - The House voted Thursday to preserve tax cuts for investors through the rest of the decade, safeguarding the centerpiece of the Republican tax agenda in a $56-billion package of tax breaks.

The bill, passed 234-197 mostly along party lines, would keep the 15 percent top tax rate for capital gains and dividends in place in 2009 and 2010, two years after their scheduled disappearance at the end of 2008.

Republicans said tax cuts championed by President Bush have revved up a sluggish economy, and Treasury Secretary John Snow praised the bill, saying, "It would encourage investment and innovation - the lifeblood of the American economy."

Democrats contended the tax cuts for investment income, and much of the GOP's economic agenda, exacerbated budget deficits and ignored average workers.

"The poor suffer. The rich benefit. The middle class is paying the bill," said House Minority Leader Nancy Pelosi, D-Calif.

The vote marked the fourth tax bill passed by the House in a week as lawmakers worked to clear some unfinished tax work. Lawmakers haven't given up hope of completing some of those tax cuts this month, but it's unclear how much can be done before Congress disbands for the holidays.

Lawmakers hope to at least complete work this month on a much smaller package of tax incentives to lure businesses and jobs back to the Gulf Coast after the region was lashed by hurricanes. Also on the agenda is an effort to blunt the bite of the alternative minimum tax, which threatens to hit about 17-million individuals and families with higher taxes next year.

[Last modified December 9, 2005, 01:20:12]