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NEW YORK (CNN/Money) -
Republican lawmakers will postpone plans to extend dividend and capital gains tax cuts as the Gulf Coast struggles to recover from Hurricane Katrina, a news report said Tuesday.
The Wall Street Journal said Republican leaders in Congress have pushed back introducing a budget bill that would have prolonged the capital gains and dividend tax cut until 2010.
While the tax cuts are not set to expire until 2008, Congressional Republicans have decided the earliest they will take up the issue is late October, the paper reported, adding any extension may not get taken up until next year.
The move has become unattractive for lawmakers since the storm demolished parts of the Gulf Coast, leaving thousands of poor people homeless and unemployed, according to the paper.
President Bush signed the 15 percent tax rate on capital gains and dividends into law in 2003, saying they would stimulate investment and help foster economic growth.
The Journal reported that both Republican lawmakers and the White House back an extension of the tax breaks, which critics have called the tax cuts a giveaway to the rich.
Citing the Securities Industry Association, the Journal reported that the capital gains and dividend taxes ended up returning an average of $950 to 24 million households in 2004 and have sparked more publicly traded companies to offer dividends.
While an extension of the capital gains and dividend taxes is on hold, both GOP and Democratic lawmakers are expected to approve a one-year exemption from the alternative minimum tax, the newspaper reported.
Without its passage, thousands of middle-income taxpayers could be hit with higher tax bills next year.
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