The bipartisan tax-cut deal outlined Monday by President Obama would:
Extend all tax rates approved under George W. Bush for two more years for all taxpayers. Republicans wanted a permanent extension. Obama wanted to extend the rates only
to households' first $250,000 of income.
Apply a 35 percent tax for two years on estates worth over $5 million. The administration had proposed a 45 percent rate with a $3.5 million threshold.
Extend unemployment insurance for 13 months, providing benefits to two million long-term jobless workers in December and seven million over the next year.
Cut payroll taxes by
2 percentage points for 2011, for a total of
$120 billion. That means employees would pay 4.2 percent to Social Security instead of
6.2 percent. A worker who earns $40,000 a year would get $800 over the year.
Extend increases in
the Earned Income Tax Credit, the child tax credit, and tuition tax credit adopted in the 2009 stimulus package that were set to expire.
Allow businesses to write off 100 percent of their capital investments for tax purposes during 2011. The current writeoff is 50 percent.
- Associated Press
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