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.

[Drago]

"My first question is, I do hope this unemployment extension doesn’t mean 99ers can collect even longer. I can maybe see keeping the extension past 26 weeks, but most certainly oppose anything that lets people collect for over 99 weeks."

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.

[kara37]

Zero

[ejdrapes]

They could have fought that anyway. The GOP should have forced Democrats to vote to raise taxes on the wealthy americans. Now if in 2 years we don't see a dramatic turn around in the economy Obama can campaign on rasing taxes on the rich. We know there will still be a deficit issue in 2 years.

[AuH2ORepublican]

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.

[ejdrapes]

Ha! This coming from the same place where every Republican, sans Sarah Palin, is called a RINO or CINO at least once. Fact is the GOP was winning this argument. We had Obama over a barrel. We should have held out for a permanent extension for as long as possible.

[VRWC For Truth]

Some victory. It's a crap sammich. Defund, defund, defund in 2011. The House APPRORIATES. End of argument.

[ShandaLear]

No, it’s not. It’s a definite lose, headlines are everything and this is a PR disaster for him.

[VRWC For Truth]

APPROPRIATIONS are the SOLE discretion of the House last time I checked.

[icwhatudo]

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!

[Blood of Tyrants]

RAISING the estate tax from zero to 35% sounds GOOD? Are you nuts?

[VRWC For Truth]

Used car salesmen offer better deals. The GOP is clueless.

[Blood of Tyrants]

Perhaps he meant 13 week extension.

[okie01]

If this is victory, I'd hate to see defeat.

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.

[Reagan Man]

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.

[dfwgator]

Extending the Bush tax cuts.

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.

[CrosscutSaw]

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.

[snippy_about_it]

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?

[tubebender]

Then 35% sounds good, especially if the first 5 million is exempted.

You are correct and this will benefit many FReepers mentioned in my will...

[VRWC For Truth]

What part of the US IS BROKE do you NOT understand?

[VRWC For Truth]

What part of the US IS BROKE do you NOT understand?