Forty-seven House Democrats have signed a letter to Speaker Nancy Pelosi urging that tax rates on capital gains and dividends be maintained at the current level of up to 15% for all earners.

It's the latest sign of widening divisions among Democrats over plans by the party leadership and President Barack Obama to allow Bush-era tax breaks to expire for higher earners, defined as families making more than $250,000, while extending them for middle-income earners.

Many centrist Democrats in the House and Senate have objected, saying raising any taxes could harm job creation and slow economic recovery. The letter urging extension of the tax breaks for dividends and capital gains joins another letter to Mrs. Pelosi, signed earlier this month by 31 House Democrats, that called for a temporary extension of all the tax breaks for ordinary income.

The Senate last week abandoned its own plan to vote on a leadership-backed partial extension of the breaks, amid complaints from vulnerable incumbents that it could hurt their chances at re-election.

House Democratic leaders have given conflicting signals in recent days, but they appear unlikely to seek a floor vote on extending just some of the tax breaks before Congress adjourns this week to campaign ahead of the elections.

An impasse before the election leaves incumbent Democrats vulnerable to criticism by Republicans that they're effectively letting taxes rise when the breaks expire at the end of this year.

But a number of incumbent Democrats worry their political exposure is higher if they vote for the administration's proposal, and can be tagged with explicitly approving tax increases.

Democratic leaders have said they won't let the middle-class tax breaks expire, a pledge Mrs. Pelosi's office reiterated Tuesday.

"The speaker has stated clearly that Congress will extend middle-class tax cuts this year," said spokesman Brendan Daly. "There is no question that Congress will do so."

The delay in holding a vote potentially sets up a clash over taxes in Congress's lame-duck session following the election. There, pressure to reach a quick compromise could lead to Congress extending all current tax levels—at least for a year or two.

Dividend tax rates are especially important to many companies that pay big dividends, such as utilities, resource companies and some tech companies. A key Bush-era change lowered dividend tax rates to the same favorable level as capital gains, spurring companies to pay out more in dividends.

The letter from House Democrats argues that raising taxes on dividends and capital gains would be harmful to companies' ability to grow and add jobs.

It also makes the case that older Americans, who often depend on dividends for income, could be hurt by a change that encourages companies to reduce their dividends.

The letter cites a recent study finding that in 2007 more than 27 million tax returns had dividends qualifying for the tax-rate reduction, and of those, 30% were from taxpayers age 65 and older.

President Barack Obama has proposed keeping the current 15% rate on dividends and capital gains for people earning less than $200,000, or $250,000 for married couples.

But he proposes raising it to 20% for people with higher incomes.

Write to John D. McKinnon at