Senate Tax Cut Plan Has Something for Everyone


• The bill extends unemployment insurance for an additional 13 months. • The normal, maximum duration of state unemployment benefits has been 26 weeks, according to Joe Minarik, a member of the Bipartisan Policy Task Force. "The economy has been deemed so weak that they are going beyond the normal 26 week increment to add another 13 months, to a maximum of 99 weeks per person," he said. "The whole notion of having so many important provisions involving so much money for a tax code on a temporary basis is really unprecedented."

Social Security payroll tax cut

• Workers earning $50,000 would get a $1,000 tax break while those making $100,000 would get a $2,000 break. Employees would contribute 4.2 percent to the social security payroll tax rather than 6.2 percent before wages reach $106,800. "This provision helps low income people the most," said Nick Kasprak, programmer and analyst at the Tax Foundation. • Republicans would have preferred a tax cut in a more "pro-growth" area, such as cutting capital gains tax, according to Ryan Ellis, tax policy director with Americans for Tax Reform.

Lower taxes for those in lower-income range • Increase in earned income tax credit, or EITC, a refundable credit for certain low-income taxpayers. This is an extension of tax relief enacted in 2003 and President Obama's stimulus bill in 2009. Yesterday's bill would extend the EITC rate for families with three or more children of 45 percent through 2012, which was set to expire in January.

• The bill retains the child tax credit at $1,000. • The "dependent care tax credit" increases the credit rate to 35 percent, and increases "eligible expenses" to $3,000 for one child and $6,000 for two or more children.

Return of the estate tax • The estate tax could return at 35 percent, with a $3.5 million exemption. "The exemption is a lot higher and the estate tax is still lower than it has ever been," said Kaspark. • If Congress does not act formally, the estate tax could return in January at 55 percent, with a $1 million exemption.

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