Here are some of the specifics of the tax agreement that President Obama struck with leaders of the Senate and House . I gleaned much of this information from the Wall Street Journal. When I could find the information, I’ve also cited the approximate cost/savings.
- The agreement is a two-year extension of the current tax rates enacted under former President George W. Bush which will mean a savings to taxpayers of $615 billion.
- A 2% rollback of individuals’ payroll (social security) taxes at a cost of $226 billion.
- The continuation of the child tax credit, earned income tax credit and a credit to help students afford college at $34 billion.
- The estate tax would be reinstated for two years at 35% only for estates over $5 million. I could not find information on how much this will raise in new taxes as there are no estate taxes currently.
- The pact would preserve extended jobless benefits, also known as unemployment insurance, for 13 months at a cost of $56 billion.
- Businesses can expense 100% of their investments in 2011. The write-off would be retroactive to September 2010.
- A 2-year extension of the research-and-development tax credit and other tax incentives to support business expansion.
Of course, all this must be agreed to and passed by the House and Senate in the next week. Time will tell what emerges.
