Skip to comments.Latest on the Tax Deal: Payroll Tax Cut, Estate Tax Back
Posted on 12/06/2010 3:36:56 PM PST by ejdrapes
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 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.
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.
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
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.
I am amazed that so many here do not realize the victory this is.....we will get to run in 2011 on making the taxes permanent....we will be able to run on killing the death tax.....kids...get a grip....
You must have read about a different deal and a different political climate in DC. The dems still control the Senate and the WH come Jan. On this deal - the Republicans won, Obama caved. Tax cuts extended for all Americans for 2 years. Of course the dems got unemployment benefits included. so what? We can only hope two years from now they can extend it again.
What is wrong with some of you? All Bush tax cuts extended for 2 years (when we may own the White House and Senate and House).
Capital gains and dividend cuts stay as well. The negative: a larger deficit, falling dollar and higher inflation in our future. Buy gold and silver while you still can.
You know it's good when the Left are going nuts tonight
The Bush tax cuts should absolutely *not* be restored, because they offer an amazing opportunity that should *not* be missed.
To downgrade and repair the Social Security System, while harming as few people as possible! Here’s the idea, and please tell people about it!
Not too long ago, “means testing” was proposed to help the SSS remain solvent. The idea was that people who already have money shouldn’t get SS benefits. It was a HUGELY UNPOPULAR idea. Politically impossible.
So instead, make people who are getting SS benefits a deal. If they need their SS money to live, fine, they can have their SS money. But if they have other income, give them a *choice* to instead of taking their SS money, to *not* take it.
Instead, they can get a *tax deduction* that would work out to them getting even *more* money, through saving their income money.
That is, the Bush tax cuts become the Social Security tax cuts.
And just because they are not taking the money owed them by SS, it makes the SS system *solvent*, overnight! And that’s phase one.
Phase two is to get people still paying into the SSS a similar deal, so they can *choose* to put money into an IRA, *instead* of SS, *and* cash in *another* year’s worth of the money they already paid into SS as a tax deduction, as long as that money also goes to their IRA.
This means that their IRA would gain two years of payments for every year they continued to earn income. A wonderful deal for them.
Again, the Bush tax cuts become Social Security tax cuts.
Lastly, only let people who are minimum wage (zone) workers enter the SS system in the first place. In the future, it will become a retirement system just for them, because they have no other retirement.
So this means that America not only gets all the benefits of the Bush tax cuts, but used in such as way as to stop the one of the two biggest drains on the federal budget.
Everybody wins. The well to do and the poor, the economy because of the tax cuts, and even the federal government doesn’t take any more of a hit than it is taking right now.
If we just restore the Bush tax cuts, we still have the huge problem of Social Security to deal with. Why not kill two birds with one stone?
One would think Chicken Little has assumed leadership of the FReepers...
No it's not a "good deal." Payroll taxes are what funds your social security account. Fewer dollars of your and your employer's contributions are going into YOUR account. In essence you get to get what should have been going into your Social Security "retirement" account.
Look up "Federal Insurance Contribution Act", "FICA," and "Social Security."
People need to understand what the numbers mean on their pay stubs.
You can give credit to Republicans if you like.
In my book, conservatives drove the agenda that gave the GOP victory on Nov2nd. Conservatives demanded the Bush tax cuts be extended.
Obama caved and both the American taxpayer and small businesses will not have their federal income taxes raised come Jan. 1ST 2011. Period. Those are the facts.
The "99'ers" will now be known as "155'ers" with the 13 month extension. Unemployment will continue to rise as new claimants join the "155'ers". Ending unemployment for "99'ers" would drop the unemployment rate by 2% to 3% in one month. There is welfare for the rest. At the very least make the "155'ers" do CCC type work projects.
The estate tax is currently at 0% (and has been for all of 2010), but will be raised to 55% on January 1 if Congress does nothing.
No, it’s not. It’s a definite lose, headlines are everything and this is a PR disaster for him.
APPROPRIATIONS are the SOLE discretion of the House last time I checked.
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!
RAISING the estate tax from zero to 35% sounds GOOD? Are you nuts?
Used car salesmen offer better deals. The GOP is clueless.
Perhaps he meant 13 week extension.
At the present time, the Republicans are a pronounced minority in both the House and the Senate. And there is a Democrat President.
Nonetheless, a victory has been achieved: Extending the Bush tax cuts.
It's hardly a defeat.
The conservative election victory aside.
Republicans haven’t even taken control of the House, yet they’ve already rolled Obama on taxes. The libdems are freaking out! Enjoy it! LOL ... and stop whining.
Well, La Deee Freakin' Dah....they'll just raise the rates somewhere else, like just by cutting out the number of deductions before the A.M.T. kicks in.
They should end the stupid Earned Income Tax Credit immediately. People who don’t even pay any Federal Income Tax get “tax refunds” because of this “credit.”
It’s time everyone pays their fair share. If you don’t pay income tax how the hell do you qualify getting a “refund”??
And they should quit paying Social Security benefits to people who never put anything into that system either.
The “progressive tax” is the most unfair corrupt BS system the government has going. Everyone should have to pay the same tax rate and ideally it shouldn’t even be on income but rather on consumption.
You don’t seem to understand. We don’t have the power to do anything yet. We won the House in November but don’t take our seats until January. We have no power yet. What aren’t you understanding about this?
You are correct and this will benefit many FReepers mentioned in my will...
What part of the US IS BROKE do you NOT understand?
What part of the US IS BROKE do you NOT understand?
So has this passed the house? Until then, I am not counting this as a done deal.
I am hearing the the unemployment extension does not extend benefits beyond 99 weeks. What it does is extend the program that allows for unemployment to run from 26 weeks to 99 weeks.
I heard this from a liberal colleague who is livid that there is nothing in the agreement for the “99’ers”.
You’re not very creative are you? Guess where my 2% is going to end up? That’s right, my 401K. Thanks zerobama for privatizing part of SS. Did some quy suggest that a few years ago?
All this for a 2 year temporary extension of existing tax rates.
What a deal!
If what I'm hearing is true, unemployment benefits will still run out after 99 weeks. What is being extenmded is the program that allows for unemployment to cover people from 26 weeks (standard unemployment) to 99 weeks.
The GOP did not fold on the tax issue. Obama and the Dems wanted $700-$800 billion dollars of additional tax money from high earners and small bussinesses to fund a government that is already too big.
STOP feeding the beast is priority #1!
We don’t want small to medium farmers to pas their farms on to their sons now do we....
looks to me like the newbs have had their DC lobotomy already
The problem here is that there are too many FReepers that don’t bother to read any more than the headline. They just jump on the bandwagon assuming what someone else wrote is gospel.
PEOPLE, GET A GRIP.
WE WON THE HOUSE IN NOVEMBER BUT DO NOT TAKE OUR SEATS UNTIL JAN 2011.
WE HAVE NO VOTES TO PASS ANYTHING THE DEMS DON’T AGREE WITH.
THE BUSH TAX CUTS WERE SET TO EXPIRE AT THE END OF 2010.
GETTING THEM EXTENDED IS A BONUS.
IF THAT MEANS EXTENDING THE UEI THEN SO BE IT.
THE DEMS COULD HAVE EXTENDED BENEFITS AND LET THE TAX CUTS EXPIRE AND THERE WOULD HAVE BEEN NOTHING...NOTHING WE COULD HAVE DONE ABOUT IT.
THIS IS A LOSS FOR OBAMA, NOT US.
“Can people specifically explain why this is a bad deal?”
I think it’s a pretty good deal. I’m not crazy about the unemployment extension, or the estate tax reinstatement but here’s the thing: we needed a deal NOW.
I read that if things hung on beyond 12/15 they’d have to prepare and release the new withholding tables, etc. And can you imagine the cost, etc. of undoing that, or re-doing it in January?
Further, if it went to January, with the current rates expired it may well have become a free for all and who knows what we would have ended up with. Can we say “uncertainty”?
A lot of rightwingers have been pushing for a payroll tax “holiday”. Hubby & I have both been at a 10% paycut for over a year, so every penny we get will help.
So, like I say, I think this is pretty good. And then libs hate it, so how bad can it be?
Actually, I think it turns out this does not extend unemployment past 99 weeks. Looks like it just continues the extension of the program for people up to 99 weeks - but not past 99 weeks.
Keep racking up the credit card debt when you are BROKE, is a financial winning strategy?? Take your ideas elsewhere. THEY NEVER WORK!
Think back a few months. Pelosi in charge of the House. Reid with 60 votes. And Obama in the White House.
This is a LOT better than we could have hoped for then.
Sounds great although I’m bound to do something to get booted off for some reason or another. ;)
I didn’t say it was right, I’m pointing out that until we actually take control we don’t have the votes to do any better at this time.
155 weeks of unemployment?
Well don’t sweat it as you’re only mentioned but no bequeath is granted or implied however that doesn’t absolve you of any money, real or imagined that you may owe the deceased whether he is dead or alive...
And if the Bush tax cuts had expired, the economy would have taken a big dive...with serious consequences for everybody (except the Democrats).
You may not agree, but it was "the right thing to do" and it's a big win.
Yeah, after reading up on "the deal" I basically agree. Looks like the GOP did pretty good. This seems like a tax cut deal to include Bush and Obama tax cuts, most of which seem acceptable and somewhat stimulative for the economy.
The economy is going nowhere with massive debt. Just pissing into the wind. Totally meaningless.
Damn! That sums it up perfectly!