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What counts as a tax hike? Not Boehner 'fallback' plan, says antitax group

Lawmakers who vote to let tax cuts lapse for millionaires would not be violating an antitax pledge, says a group led by activist Grover Norquist. House Speaker John Boehner has put forward such a bill, stirring fury of other conservatives.  

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Until now, Norquist had said only that whatever deal Congress and the White House struck on taxes should have to pass a “laugh test” from voters in the long run. 

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The House is scheduled to take up Boehner's bill on Thursday, say GOP lawmakers. House Democrats oppose it, and Senate Democrats say the bill would be dead on arrival at the Senate. The White House has said it would veto the measure should it somehow clear Congress. 

Liberal Sens. Charles Schumer (D) of New York and Tom Harkin (D) of Iowa argued Wednesday that the measure would actually raise taxes because it would not extend three provisions, part of the 2009 economic stimulus legislation, that benefit lower-income families, college students, and families with more than three children. 

The Boehner bill would retain capital gain and dividend tax rates at 15 percent for those earning less than $1 million in household income, but it would raise those rates to 20 percent for Americans earning more. Without a congressional fix, those rates would reset at year's end to more than 40 percent for all taxpayers.

Though Americans for Tax Reform says the Boehner bill passes the sniff test, several other conservative organizations have savaged it. 

“On the substance, this bill is anti-growth,” read a legislative alert from the fiscally conservative Club for Growth, urging lawmakers to vote against it. “It increases tax rates for those making over $1 million while also raising taxes on capital gains and dividends. We don't buy into the Washington-speak, suggesting that these are actually tax cuts.”

The conservative Americans for Prosperity, too, urged lawmakers to oppose it, saying congressional Republicans had already extended tax rates for all Americans and so needed no further fallback legislation. Boehner has characterized the bill as a fallback measure should talks fail with the White House over devising a broader debt- and deficit-reduction package.

“All this Plan B proposal would do is put Republicans on record embracing the Left’s divisive and arbitrary income threshold,” Americans for Prosperity said Wednesday in a statement. “It would also begin a never-ending quest to move that higher rate down to lower income thresholds, as everyone knows that there is not enough tax revenue in the upper brackets to solve the nation’s runaway spending addiction.”

What do these conservative groups want?As the Club for Growth's Andy Roth put it, they'd rather go over the fiscal cliff – in which case taxes would rise on all American taxpayers and spending reductions decried by both parties would go into effect – and then move on to a fight over the national debt ceiling, which the federal government will reach in the first quarter of 2013. By threatening to refuse to raise the national debt limit, the speaker and congressional Republicans will have enough leverage over Democrats to win the reductions they seek in entitlement programs and spending, believe Mr. Roth and like-minded colleagues such as conservative advocacy group Heritage Action.

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