WASHINGTON (AP) – House Democrats are looking to unravel many of President Bush’s tax cuts for wealthy people to pay for protecting middle-class families from a hidden tax increase.

They also plan to provide modest tax relief to the working poor and married couples in legislation being fashioned by Representative Charles Rangel, the New York Democrat who is chairman of the House Ways and Means Committee.

Mr. Rangel’s plan represents the Democrats’ first major tax salvo since they won control of Congress and comes after years of criticizing Mr. Bush’s tax cuts as giveaways to the rich. A House vote on it is possible as early as June.

The measure, still in its early phases, would protect married couples making $250,000 or less each year from paying the alternative minimum tax, or AMT.

Without action, 20 million mostly unsuspecting taxpayers – on top of 4 million paying it now – could end up paying AMT surcharges averaging about $2,000 next filing season.

“This would be the biggest tax increase on the middle class in the history of our country,” said Represemtative Rahm Emanuel, Democrat of Illinois.

The tax was designed in 1969 to make sure the wealthy paid at least some tax. But it has begun ensnaring an increasing number of middle-class people.

Taxpayers with children in high-tax, Democratic-leaning jurisdictions are especially vulnerable.

The AMT relief would be financed by a surcharge of 3 percentage points to 5 percentage points on people with incomes exceeding $500,000, lawmakers and aides said. The top income tax rate is presently 35 percent.

Democrats say the proposal would hit about 1 million people at the very top end of the income scale and in typical cases would take back most of the 2001 and 2003 tax cuts for them.

The plan is in sync with long-standing complaints by Democrats that too many of Bush’s tax cuts favored the rich. But Republicans say the move, if enacted over their opposition, would hurt the economy, particularly small businesses that file as individuals.

“Raising tax rates depresses economic growth, no two ways about it,” said Representative Paul Ryan, Republican of Wisconsin.

The AMT is generally paid by comfortably middle-class taxpayers.

Democrats want to spread relief to those in lower brackets. According to a House Democratic tax aide who spoke on condition of anonymity because the situation is fluid, they would do it by:

_Raising the standard deduction.

_Making the child tax credit fully deductible for low-income parents.

_Increasing the earned income tax credit for workers with more than two children.

As with other party priorities, the effort could stall in the Senate, where Democrats have only a two-seat majority.

Senate Democrats are discussing a two-year “patch” of the AMT but are unlikely to buy into their House colleagues’ idea of offsetting the costs by raising other taxes.

Fixing the tax is expensive, averaging $50 billion a year or so by some estimates.

A House-Senate Democratic divide over taxes also threatens efforts to pass Democrats’ budget blueprint for next year. A half-dozen Senate Democrats, some facing re-election in 2008, want to embrace at least some of Bush’s most popular 2001 and 2003 tax cuts.

Those include the 10 percent tax bracket on the first $12,000 of a couple’s income and tax relief for married couples, people with children and those inheriting large estates.

Many observers believe House negotiators will cede ground in upcoming talks on the budget because the Senate gave a whopping 97-1 vote last month to endorse a plan by Max Baucus, D-Mont., to extend $180 million in middle-class tax cuts over 2011-12.

Mr. Rangel and other House Democrats are balking at that idea.

The Bush tax cuts will expire at the end of 2010 if not renewed. As a practical matter, the future of the Bush tax cuts probably will be decided after the 2008 presidential election. Their fate could depend on the balance of power after the election and on the financial outlook at that time.

“The tax cuts (Baucus is) talking about in all probability will be renewed when they expire,” said House Budget Committee Chairman John Spratt Jr., Democrat of South Carolina. “The question is: ‘When do you renew them and which ones get renewed?'”

Mr. Spratt, however, is running into opposition from some moderate Democrats who are purists regarding a House rule requiring that tax cuts be offset by increases elsewhere in the tax code.

Senate negotiators on the budget – a nonbinding measure setting outlines for subsequent tax and spending legislation – say they cannot budge on the popular Baucus plan, which devotes $180 billion to renewing middle-class tax breaks in 2011-12.

Any paring back of Mr. Baucus’ plan in House-Senate talks probably would leave Senate Democrats shy of votes to pass a budget, said Senator Conrad, Democrat of North Dakota and the chairman of the Senate Budget Committee.