Latest on the Tax Deal: Payroll Tax Cut, Estate Tax Back

NRO ^ | December 6, 2010 | Daniel Foster

[ejdrapes]

Latest on the Tax Deal: Payroll Tax Cut, Estate Tax Back

December 6, 2010 4:45 P.M.

By Daniel Foster    

What we’re hearing: A two-year extension of all current income, dividend, and capital gains tax rates, plus a one-year (or 13 month) extension of unemployment insurance.

Chuck Todd reports that the tax deal could include a payroll tax holiday. But Marc Ambinder reports that it will instead include a two percent two percentage point reduction in payroll tax that would replace President Obama’s favored Making Work Pay tax credit, and a reinstatement of the estate tax over a certain yet-to-be-decided threshold.

Multiple reports are indicating a deal is close to being struck.

UPDATE: We’re now hearing that the estate tax will be set at 35 percent for two years, with the first $5 million exempted. [Daily Caller's Jon Ward first to report.]

UPDATE II: Jake Tapper has more details on what’s in the proposed deal, including:

–allowing businesses to deduct 100% of certain investments in the first year (President Obama pitched this in September).

–extending the American Opportunity Tax Credit (college tuition), Child Tax Credit and Earned Income Tax Credit plus their refundability. 

One other wrinkle Tapper is reporting, potentially huge: the unemployment benefits extension will not be offset, at least not as part of this deal. This makes it likelier that Republicans in both houses will challenge it from the right, and that any voting majority will have to be cobbled together from both caucuses.

President Obama is supposed to address the deal at 6:10 PM.

[crusty old prospector]

Only problem with your rationale is that they have to sell the farm or ranch to pay the taxes. Bye, bye family farm.

[yefragetuwrabrumuy]

What you said is true, but prying largess from the hands of recipients is politically difficult, especially if they have enough money to fight you. So the trick is to wean the wealthy ones off of it without screwing them over.

Later, you can then dispense with the more harmless parasites, because they are less likely to mount an effective defense.

However, after all is said and done, there are still a lot of people out there who are intellectually incapable of managing their own retirement. And there are so many of them that they cannot be ignored, left to become public charges. So for them, a federally managed retirement, using their money to pay for just their retirement, is a reasonably sound idea, and politically possible as well, as long as it is well managed.

Which means it has to be a public-private deal, with no external funds, and government unable to dip into the till. And out of the hands of fast money types as well. This would be the best outcome for everyone concerned. Giving the minimum wage workers a retirement that they themselves pay for, not taxpayers.

[JTHomes]

If some rich old terminal patriots wanted to make big news they could organized a mass suicide on the capital steps on new years eve. I’d hate for something like that to happen, truly, but it would be a great last stand.

[Deo volente]

Fewer dollars of your and your employer's contributions are going into YOUR account.

It doesn't matter, because we don't have individual SS accounts into which we "deposit" contributions. It's not a "savings" account. They're all thrown into the general SS fund, from which payments are made to recipients. The amount of your eventual payment is determined by your average INCOME over the course of your working years. The amount of your contributions has nothing to do with the amount you'll receive when you retire.

[LadyShires]

OH AMEN! How long I have boiled over this nonsense.

[Moose4]

It’s a start. Come January, we need to keep the pressure on and absolutely DO NOT LET UP, ever. Keep pushing, always keep pushing. Let’s make that ratchet effect swing to the right this time instead of the left...the socialists never stop dragging this country to the left, so we can’t stop pushing back, not now, not ever.

This is a good starting point for 2011. Take it, claim victory, and push forward once the Republicans control the House in January.

}:-)4

[Smogger]

Free money for 155 weeks for those who don’t feel like working and finance it by stealing money from working people when they die?

All this for a 2 year temporary extension of existing tax rates.

What a deal!

Please stop throwing around this 155 weeks meme. No one gets unemployment benefits beyond 99 weeks, and to have already gotten that much you would have to been in one of the states with the highest unemployment rate and lost your job all the way back in 2008. In which case your unemployment benefits have ALREADY expired.

Geesh!

The 13-month extension will continue to provide those federal benefits up to but not exceeding 99 weeks to those in states with the highest level of unemployment who have exhausted their 26 weeks of state unemployment insurance.

States offer different tiers of federal jobless benefits based on their individual unemployment levels.

--http://thehill.com/blogs/on-the-money/domestic-taxes/132399-democrats-pleased-with-jobless-benefits-extension-but-mulling-over-tax-cut-package

[Smogger]

And the “YOUR account” is a fiction, unless and until we get individualized SocSec accounts.

Thank God there are a few people that understand this. It's your job to keep repeating this. I'll make it mine to clear up this 155 week meme. ;-)

[Smogger]

Ugh.

“The 13-month extension will continue to provide those federal benefits up to but not exceeding 99 weeks to those in states with the highest level of unemployment who have exhausted their 26 weeks of state unemployment insurance.

States offer different tiers of federal jobless benefits based on their individual unemployment levels. “

—http://thehill.com/blogs/on-the-money/domestic-taxes/132399-democrats-pleased-with-jobless-benefits-extension-but-mulling-over-tax-cut-package

[WOSG]

I’d vote no on more UI...

but you didn’t answer my question - what would you have done? You can’t just throw rocks at the guys in the arena and say they are wrong, tell us what you would do better.

[The_Reader_David]

Yup, all those down-sides are there. But without the deal, all the tax rates would be up, and with the support of two RINOs they could have gotten most of that crap through anyway (certainly the unemployment extension).

Remember: Pelosi is still Speaker, they still have a 58-42 majority in the Senate, not 54-46, and the Clinton era tax rates and the even higher death tax (both in terms of less exclusion and higher rates) would have come back with no action by anyone.

This was a win. Not as big a win as we’d like, not as big a win as we need to push for once the GOP controls the House (and the power of the purse), but given the actual facts on the ground in D.C., right now, a win nonetheless.

Everyone quit whining and save your energy for holding your Congressman’s and Senator’s feet to the fire (esp. your Senator if he or she is a Republican, even a RINO) to block the odious legislation that’s the ‘Rats have stacked up behind this for rest of the lame duck session (the DREAM Act, repeal of DADT, and various other obnoxious bills that don’t get as much press). And save a little energy for pushing a take-no-prisoners attitude once the new Congress is sworn in.

[icwhatudo]

"Please stop throwing around this 155 weeks meme. No one gets unemployment benefits beyond 99 weeks, and to have already gotten that much you would have to been in one of the states with the highest unemployment rate and lost your job all the way back in 2008. In which case your unemployment benefits have ALREADY expired.

Geesh! "

The mention of 155 weeks was from yesterday as many people were confused about the meaning of the 13 month extension due to lack of clarification by the media. I made the correction this morning here and then later here on a different thread thanks to the posting of a helpful freeper who found a good news article explaining it.

Geesh!

[Drago]

Here is a Nevada specific article:

http://www.lvrj.com/news/nevadans-who-have-exhausted-unemployment-benefits-won-t-get-extension-111463934.html

We will need to see what actually gets voted on...things could change in the meantime.
http://thomas.gov/

[socialism_stinX]

This is the best deal we can get at this time. By 2012 we’ll see serious commodity inflation, especially in crude oil, and gasoline pries will be up around $3.75 per gallon in the summer of 2012. There is so much money being printed now and that money will flow into higher prices for products with the most limited supply, especially food, oil, and gasoline. If the GOP plays its cards right, we can take a lot of votes from Obama by pointing out how he has restricted the expansion of offshore oil drilling and continues to restrict offshore drilling permits in the Gulf of Mexico because of one incredibly stupid drilling accident by BP. (BP is a company that really wants to be an alternative energy company. I say kick them out of the US and speed up their transition to alternative energy!).

There’s going to be serious inflation of food and energy prices in the next two years and job growth will be sluggish because of the financial burden and heavy regulations imposed by Obamacare and the EPA. We’ll probably still have 8.5% unemployment on election day in 2012. A solid Republican candidate can win the Presidential election decisively in 2012 on a platform of tax relief, repeal of Obamacare, expanded offshore oil drilling (with strong safety standards to control the idiots inside BP), and the end of moronic CO2 regulation by the EPA.

[TomasUSMC]

I have never seen the left attack their own President like they did today. Obernut “You are God Damned Wrong”. Madcow tore odumbi a new one too....making fun of him and showing how his claims of getting the Republicans to give in on tax credits was something the GOP was gonna vote for anyway.

ODUMBI GOT A BIGGA FATLIP TODAY.

[PalinNow]

there is no estate tax currently.

[gleeaikin]

One deal I do hope we make is the START treaty. The sooner we reduce the overkill in nuclear weapons in Russia the safer we will be. The more nukes they have, the greater the danger they will get in the hands of free lance terrorists or the money hungry mafias there.