Today was all about the latest
legislation on tax cuts: whether it
was via a media outlet or in passing
conversation, one could not get away
from the fact that the political
landscape has been abuzz with the
most recent tax law.
Yes, today was filled with constant
commentary on what this will mean for
the future---and no I don't mean in
regards to policy, I mean in regards
to the shift in the power hiarchy of
the political landscape. Questions
like: is this a sign of Obama
conceding to the R's? What will
liberals do if it passes? What will
conservatives do if it fails? In
either scenario, all people seemed to
care about is who should be thrust up
as the victors and who should hang
their head in shame.
While I'm always game for an indepth
session full of speculation about
what may or may not constitute as
dirty playground bullying tactics on
Capital Hill---I must admit that what
I really want to know is---and this
is the most shocking question of all
----what does the new legislation
mean exactly? How will it impact the
people?
Below you will find a breakdown of
the bill as provided by National
Write Your Congressman (for more
information please visit
http://www.nwyc.com/).
Obama Outlines Tax Compromise -
12.07.2010
Highlights of Tax Cut Deal
President Obama proposed a compromise
“framework” Monday night to resolve
the year-end standoff over the
extension of the 2001 and 2003 tax
cuts. Obama’s compromise proposal
would:
Extend the 2001 and 2003 tax cuts,
which are set to expire on Dec. 31,
for all income levels.
Revive and extend the expired estate
tax at a rate of 35 percent and an
exemption level of $5 million.
Renew and extend for the 13 months
expired funding for emergency
unemployment benefits.
Cut the Social Security payroll tax
from 6.2 percent to 4.2 percent for
one year.
Allow businesses to write off the
full cost of capital investments for
one year.
Revive and extend through 2011 the
expired “patch” to prevent millions
of taxpayers from having to pay the
alternative minimum tax.
Extend other elements of the 2009
economic stimulus law (PL 111-5).
President Obama sought a quick end to
the tax standoff on Capitol Hill and
offered a compromise “framework” that
includes several concessions to
Republicans.
The framework would extend all of the
2001 and 2003 tax cuts for two years
while also extending jobless benefits
for 13 months, reviving the expired
estate tax and cutting payroll taxes
for a year.
While Obama secured concessions from
Republicans—notably the unemployment
benefits extension and the payroll
tax cut—he bartered away a central
plank in the Democratic platform for
the past decade: that tax breaks for
the highest income brackets should
expire at the end of this year.
Obama announced the outline which he
wants the House and Senate to pass
before leaving for the year.
Republicans immediately cheered the
plan, while Democrats remained quiet
as they prepared to review the
details.
The proposal would extend expanded
unemployment benefits, which expired
last week, for 13 months, without
paying for the new coverage. It also
would establish a new 2 percentage
point payroll tax credit for 2011, at
a cost of $120 billion, and allow
businesses to write off the full cost
of new capital investments for a
year.
Obama conceded that he had given in
to Republicans on an issue important
to him and many congressional
Democrats—allowing the expiration of
the Bush-era tax cuts for family
income above $250,000. But he told
Democrats and Republicans unhappy
with the deal that it needs to happen
this year.
“I know there’s some people in my own
party and in the other party who
would rather prolong this battle,
even if we can’t reach a compromise,”
Obama said. “But I’m not willing to
let working families across this
country become collateral damage for
political warfare here in
Washington.”
“The American people didn’t send us
here to fight symbolic battles or win
symbolic victories,” Obama added.
Beyond Democratic resistance to the
extension of the upper-income rates,
the estate tax deal is likely to
anger liberals, who have long hoped
to let the levy shoot up to 55
percent, with a $1 million exemption,
as scheduled on Jan. 1. The estate
tax deal is more generous than the
proposal favored by President Obama
and most congressional Democrats—a 45
percent rate with a $3.5 million
exemption level.
Republicans, however, appeared to
embrace the deal, having conceded
earlier that they would allow a long
-term extension of expanded jobless
benefits in return for the tax cut
extension.
Rep. Dave Camp (R-MI), the incoming
chairman of the Ways and Means
Committee, said that “preventing a
massive, job-killing tax increase on
families and small businesses is my
No.1 priority. This framework will
allow us to extend all current tax
rates and give economic recovery and
job creation a chance. The failure to
reach and pass an agreement
preventing a tax hike would have been
devastating for families, especially
those who are still looking for
work.”
Senate Republicans suggested that the
Obama proposal is effectively a done
deal. Minority Leader Mitch McConnell
(R-KY) said on Twitter, “I am
optimistic that Dems in Congress will
show the same openness to preventing
tax hikes the admin has already
shown.”
Obama said his proposal included the
extension of several other expiring
pieces of the stimulus.
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