Tax Cut Deal, Dealt
President George W. Bush invoked tax reductions while in office. Today, a vote of 81-19 passed the extension of the controversial tax cut package of $858 billion.
President Barack Obama urged lawmakers to vote “yes” on the deal. Obama states, “"It will help lift up middle-class families who will no longer have to worry about a New Year's Day tax hike."
The matter now lies in the hands of the House of Representatives. Majority Leader Steny Hoyer, D-Maryland reports the House will take up the bill on Thursday.
This will include the following factors, among other continued tax breaks:
- A 2-year extension of the Bush-era tax cuts set to expire December 31
- An extension of unemployment benefits for 13 months
- A cut in the payroll tax by 2 percentage points for one year
- Restore estate tax at a lower level to 35% on amounts above a $5 million individual exemption
A handful of House Democrats would rather change the estate tax levels, approved previously in a separate House bill, exempting tax amounts beyond a 45% rate and inheritances up to $3.5 million. On the flip side, two dozen House Democrats would rather see the tax package be passed with no change, allowing President Obama to directly sign the bill into law.
CNN reports that Republicans involved in the negotiations with the White House on the package have warned that any changes by the House could derail the entire proposal, causing tax rates to increase in 2011.
What if the House passes a bill differing from the Senate’s version? The package revision would return to the Senate for yet another vote. The Senate could send the original bill back without change to the estate tax provision for a second house vote. House liberals could note the attempt was made to change it.
Deadlines are fast approaching and the push is on.