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Ad war breaks out over tax debate on Capitol Hill

July 30, 2012|By Lisa Mascaro
  • A screenshot from the Democratic Congressional Campaign Committee's ad "The Millionaires."
A screenshot from the Democratic Congressional Campaign Committee's… (DCCC / Los Angeles Times )

WASHINGTON -- A political ad war has broken out as Congress prepares to vote this week on a Republican proposal that allows tax breaks across all income levels, even for the wealthy – an approach that President Obama has vowed to veto.

The legislation has no chance of becoming law, but gives GOP lawmakers preparing to hit the campaign trail a counter-punch to Obama’s proposal, which was approved last week in the Senate and raises taxes on those earning more than $250,000 a year.

Key GOP lawmakers are being targeted in the cheeky Democratic campaign committee ad released online Monday as favoring tax breaks for millionaires.

“Republicans want to give you, the millionaire, another tax break,” the ad announcer says, complaining about the high costs of a yacht, jet and other images flashing on the screen.

Not to be outdone, the Republican-aligned group, American Action Network, is out with an Olympics-themed online piece that shows China outpacing the U.S. if “liberals” in Congress allow taxes to go up on business owners who file as individuals under the tax code.

“If taxes spike, small businesses will be forced to start from behind,” the ad narrator says, as an athlete becomes draped in the Chinese flag.

The House is set to vote midweek on the Republican proposal that would extend for another year the tax breaks first approved during the George W. Bush administration that expire in December.

Obama wants to keep the rates low for most Americans, but hike rates on the top 2% of taxpayers – on income above $200,000 for singles and $250,000 for married couples. The top tax rates would rise from 33% and 35% today, to 35% and 39.6%; rates on capital gains and dividends for those higher-income Americans would also rise, to 20%, up from 15%.

Democrats say wealthier Americans should pay a fair share to help balance the nation’s books, but Republicans argue that rate hike will hurt small business owners, most of whom file their taxes as individuals, rather than corporations. Studies show about 3% of those business owners, about 1 million filers, make enough to be snared by the tax.

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