The Associated Press has reported that Senate Republican leader Mitch McConnell predicts the Senate will vote to extend Bush era tax rates to all taxpayers. The only issue to be negotiated with Democrats and the White House is for how long.Republicans are calling for a permanent extension to the Bush tax cuts of 2001 and 2003 for all taxpayers. President Obama, on the other hand, wants to extend the cuts to individuals making less than $200,000. A temporary extension of one to three years (for all taxpayers) would represent a compromise between both sides.

But the White House had signaled it could be amenable to a temporary extension while stressing its opposition to a permanent extension of the tax rate for wealthier taxpayers.

Even if both parties agree on a tax cut extension compromise, there may still be another bone of contention. Democrats want to include extending unemployment benefits as part of the tax agreement.

Considering the Republicans will greatly increase their power on Capitol Hill in January, chances are they will have little incentive to make concessions this year.

Source: associated press