The US House of Representatives has passed a bill that would extend tax cuts for middle-class Americans while letting them lapse for those on income above $US1 million. Voting was 234 votes to 188.
The bill keeps tax rates low for Americans making less than $US200,000 per year.
The rates were enacted by President George Bush and the Republicans in 2001 and 2003.
The bill is expected to fail in the Senate, where Republicans favour low rates for all taxpayers.
The BBC reports the tax cuts are due to expire at the end of this year. Rates for all US taxpayers would then rise.
Negotiations on tax issues continue between the White House and Republican leaders, following a bipartisan summit on Tuesday.
The bill passed by 234 votes to 188 in the House would permanently extend the lower tax rates for individuals making less than $US200,000 per year and for households making less than $US250,000 per year.
The measure is expected to fail in the Senate, where the Democrats lack the votes to push it through against Republican opposition.
Senate leaders are planning a series of votes on tax proposals on Friday, on both Democratic- and Republican-backed measures. None is expected to get the 60 votes needed to pass.