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.

[crazyhorse46]

So has this passed the house? Until then, I am not counting this as a done deal.

[NRG1973]

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”.

[newbie 10-21-00]

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?

[NRG1973]

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!

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.

[Reagan Man]

I understand very well what is going on in DC.

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!

[GraceG]

We don’t want small to medium farmers to pas their farms on to their sons now do we....

[WorkerbeeCitizen]

looks to me like the newbs have had their DC lobotomy already

[snippy_about_it]

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.

[jocon307]

“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?

[Longbow1969]

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.

[VRWC For Truth]

Keep racking up the credit card debt when you are BROKE, is a financial winning strategy?? Take your ideas elsewhere. THEY NEVER WORK!

[earlJam]

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.

[SouthTexas]

Sounds great although I’m bound to do something to get booted off for some reason or another. ;)

[snippy_about_it]

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.

[FreeReign]

The "99'ers" will now be known as "155'ers" with the 13 month extension.

155 weeks of unemployment?

Absolutely stunning.

[tubebender]

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...

[okie01]

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.

Won't happen.

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.

[Longbow1969]

So, like I say, I think this is pretty good. And then libs hate it, so how bad can it be?

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.

[VRWC For Truth]

The economy is going nowhere with massive debt. Just pissing into the wind. Totally meaningless.

[Drill Thrawl]

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?

Damn! That sums it up perfectly!