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Senate braces for symbolic showdown on dueling tax rate bills

 

Senate leaders are plowing ahead with test votes Wednesday on dueling bills that tackle the politically difficult question of what to do about the expiring Bush-era tax rates. 

Senators planned to vote Wednesday on a $250 billion Democratic bill that would extend expiring tax cuts next year for families making less than $250,000 a year, and let rates rise for everyone else. 

In a change of plans, leaders also scheduled a test vote on the Republican proposal to extend the rates for everyone. 

Each side is leveling similar charges at the other -- charges of endangering the middle class, not to mention the fragile economic recovery. Republicans say that failing to extend them for households making more than $250,000 won't just hurt the wealthy. It'll hurt small businesses too. 

House Speaker John Boehner, R-Ohio, was ready to push legislation through his chamber next week that closely mirrors the Senate GOP measure. Republicans there introduced their bill on Tuesday, accompanied by another measure designed to speed work next year on legislation overhauling the entire tax code.

The clash in the Senate underscored how little the partisan tax-cutting duel had to do with actually passing a law this year. If anything, it highlighted how entrenched both parties' views were.

"Democrats will simply never agree we should hand out more tax breaks to the richest 2 percent of Americans while this economy is in the situation it's in now," said Senate Majority Leader Harry Reid of Nevada, sponsor of the Democratic bill.

The GOP bill ignores some tax reductions for low- and middle-income families that Democrats want to extend.

These include the American opportunity tax credit, worth up to $2,500 to cover college expenses; language making the earned income tax credit more generous for large working families and some married working couples; and a boost in the tax refunds some families get under the child tax credit.

All were part of Obama's 2009 stimulus bill, which Democrats say were meant to be permanent but Republicans say were only a short-term response to the recession.

Combined, those Democratic provisions would provide tax breaks averaging $1,000 to 25 million families, according to Treasury Department figures distributed by the White House.

Republicans also proposed bigger tax write-offs than Democrats did for small businesses taking deductions for the costs of buying some equipment.

The Associated Press contributed to this report.