Democrats in the Senate are proposing a one-year extension of Bush-era tax rates, which are set to expire at the end of the year, with a $200,000 cutoff for individuals and $250,000 for couples, according to reports.
The decision by Senate Democrats to move forward with a proposal similar to President Obama, who has called for extending the Bush era-rates for families making $250,000 or less intensifies the tax fight ahead of the November elections.
This week, President Obama launched efforts to push lawmakers to extend the lower rates for middle class families, while allowing taxes to rise on others.
The GOP House is expected to vote on a one-year extension of all Bush-era tax rates before they break for the August recess. Republican leaders in both the House and Senate have also considered including provisions which could force Congress to take up comprehensive tax reform in 2013.
Earlier this week, White House press secretary Jay Carney, however, said Obama would veto any bill that extended the rates for all.
Republicans have criticized Democrats’ proposals as a tax hike that would stem hiring in a time of stubbornly high unemployment.
In his weekly address this week, Obama dismissed the GOP's contention as "more top-down economics.
"Under my plan, 98 percent of American families won’t see their income taxes go up at all," Obama said. "But the other 2 percent of Americans will have to pay a little more in taxes on anything they make over $250,000."
The Senate proposal could be voted on as early as the week of July 23, according to Politico, which first reported the measure.