Rogue Dems Buck Party, Save Seniors

House Democrats adjourned this week without a vote on extending the Bush tax cuts set to expire in January. While they seem content to blame Republican leadership for the failure, it turns out that a group of Democratic House members bucked party leadership to join with the GOP in a move aimed at protecting senior citizens from a massive tax hike – and quite possibly indicating an eventual bipartisan kill-off of President Obama’s tax agenda .

Led by Rep. John Adler, D-N.J., the 47 House Democrats wrote a letter Tuesday to House Speaker Nancy Pelosi, D-Calif., urging her to keep lower tax rates on dividends and capital gains that will expire at the end of this year.

A number of tax cuts enacted in the past decade are due to expire at the end of this year. Our fiscal policy should be one that maximizes economic growth and private sector job creation. That is why we strongly believe that Congress should extend the current tax rates for dividend and long-term capital gains taxes…We [] have a responsibility to protect middle class families and seniors from harmful tax increases and their economic impact…

Many seniors depend on this income to supplement their fixed retirement income. A recent study found that in 2007 over 27 million tax returns had dividends qualifying for the reduced tax rate reduction. Of those returns, 61 percent were from taxpayers age 50 and older and 30 percent were from taxpayers age 65 and older.

President Obama and Democratic leadership are also looking to allow other special brackets to expire, particularly long-term capital gains, which would affect couples earning more than $250,000 a year and individuals earning more than $200,000.

Citing the study mentioned in the letter, this small band of Dems tried to make clear to their leadership how deeply those saving for retirement and those in retirement would be affected.

Democrats’ proposal to raise taxes on seniors is a political gamble as well, one that could have disasterous implications in key battleground states. In the tossup state of Nevada, voters age 60 and older made up 28 percent of the electorate in 2006. In Florida, those age 60 and older represented 34 percent of voters in the last midterm election.

The group of rogue Democrats ended their plea by expressing concern that Obama’s plan to raise taxes, which could hamper recovery and decrease the amount of capital available to companies, would damage a fragile economy . “Our economy is fragile,” the Democrats wrote. “We need tax policies that will promote our recovery. Raising taxes on capital gains and dividends could discourage individuals and businesses from saving and investing. We urge you to maintain the current tax rate for both dividend and long-term capital gains taxes.”

Democratic leadership does not, however, appear to be listening.