Senate Approves Extension of Bush Tax Cuts!

The United States Senate gave approval to the tax and stimulus package that would extend tax cuts for all Americans and would cost nearly $855 billion, according to preliminary projections by the Joint Committee on Taxation.
 
The vote received support from both the Republicans and the Democrats and is one of the first major deals of a split government working together on ways to improve the economy.

The Senate voted 81-to-19 in favor of the deal.  Maybe as early as this evening, it could move to the House of Representatives for their approval.

The deal has received opposition from both major political parties as the tax cuts continue for all Americans, not just the middle or lower incomes. Some Democrats object to extending the tax cuts for families with income above $250,000 per year while Republicans are upset about the additional spending on social programs like unemployment benefits.

“I think, frankly, that ultimately we will pass legislation,” House Majority Leader Steny Hoyer told reporters yesterday. “The vote in the Senate indicates an urgency that is felt by a broad spectrum that the middle income taxes not be increased come January 1. In order to affect that, you’ve got to pass the bill.”

Both parties had particular agendas that were included in the bill.  The tax cuts were extended for all Americans regardless of income, but the 15 percent rate on capital gains and dividends are going to be extended as well. New parameters have been set for an estate tax including an exemption of $5 million per person or $10 million per couple with a maximum rate of 35 percent.  If the estate tax exemption expired it would have been $1 million per person and a maximum rate of 55 percent.

The bill also keeps unemployment aid flowing to the long-term unemployed for an additional 13 months. Benefits typically last 26 weeks but will be extended to 60 weeks in states with less than 6 percent unemployed and 99 weeks with unemployment more than 8.5 percent.

The bill also is aimed at giving breaks to individuals and businesses to spur growth in the economy.  College tuition credits, expanded child tax credits and earned income tax credits are all in store with the House approval.

“We worked hard to negotiate an agreement that’s a win for middle-class families and a win for our economy,” Obama said. “We can’t afford to let it fall victim to either delay or defeat.”

To schedule time to see how your tax situation may change, please contact us at Liberty Tax to aid in your situation.

-david rocci

Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.

Posted To: Tax Rants by David Rocci By: David Rocci On: Thursday, December 16, 2010
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