President Barack Obama and most Democrats on Congress favored extending the tax breaks just for the middle class, or families earning less than $250,000. But they were skeptical of keeping the tax cuts in place for the wealthiest age earners.
Their hesitance drew condemnation from many congressional Republicans.
Even former GOP presidential hopeful Fred Thompson got into the act, cutting a TV ad for the League of American Voters.
"Folks, America's economy is struggling, and Congress is about to make it a whole lot worse. Our nation faces a massive, automatic tax increase at the end of this year when the Bush tax cuts expire," Thompson said.
The U.S. Treasury Department estimated that extending just the middle-class tax cuts would cost about $3 trillion over 10 years. Adding tax cuts for the wealthiest Americans would cost roughly another $680 billion, according to the treasury.
Here's a look at individual tax rates and shares by income in 2007, the most recent data available from the Internal Revenue Service:
- The top 1 percent: Americans who earned an adjusted gross income of $410,096 or more accounted for 22.8 percent of all wages. But they paid 40.4 percent of total reported income taxes, an increase from 39.9 percent in 2006, according to the IRS.
- The top 5 percent: Americans who earned $160,041 or more accounted for 37.4 percent of all wages in 2007. But they paid 60.6 percent of the country's total reported income taxes, up from 60.1 percent a year earlier.
- The top 10 percent: Americans who earned at least $113,018 paid 71.2 percent of the nation's income taxes, up from 70.8 percent a year earlier.
- The top 25 percent: Americans who earned at least $66,532 paid 86.6 percent of the nation's income taxes, up from 86.3 percent a year earlier.
- The top 50 percent: Americans who earned at least $32,879 paid 97.1 percent of the nation's income taxes, up from 97 percent a year earlier.
- The bottom 50 percent: Americans who earned less than $32,879 paid 2.9 percent of the nation's income taxes, down from 3 percent a year earlier.
An important side note: While the tax burden on this country's largest wage-earners has continued to grow since the Bush tax cuts were passed, the impact has been substantially muted.
The income gains made by the wealthiest Americans far outpaced that for the remaining workers, according to an analysis conducted for the Washington-based Center on Budget and Policy Priorities
In fact, two-thirds of the nation's total income gains from 2002 to 2007 flowed to the top 1 percent of households, the 2009 analysis of IRS data by economists Thomas Piketty and Emmanuel Saez showed.
That top 1 percent held a larger share of income in 2007 than at any time since 1928, their analysis found.