What the tax bill means to you
The package extends many Bush-era tax breaks, including lower rates, and cuts the Social Security payroll tax from 6.2% to 4.2%.
This post is from the Associated Press.
Here are the highlights of the tax package passed by Congress late Thursday and sent to President Barack Obama. It would cost about $858 billion; most provisions, which were to expire Jan. 1, would be extended for two years, unless noted.
The package extends:
- Lower rates for taxpayers at every income level. The top rate, on taxable income above $379,150, would stay at 35%, instead of increasing to 39.6%. The bottom rate, on taxable income below $8,500 for individuals and $17,000 for married couples, would stay at 10%, instead of increasing to 15%. Cost: $186.8 billion.
- More generous itemized deductions for high-income households. Cost: $20.7 billion.
- A more generous $1,000 child tax credit. Cost: $71.7 billion.
- Marriage penalty relief, increasing the standard deduction for married couples. Cost: $18 billion.
- A more generous Earned Income Tax Credit for low-income families. Cost: $15.7 billion.
- A series of tax breaks for students and their families, including interest deduction for student loans and an exemption for employer-provided educational assistance. Cost: $3.3 billion.
- A deduction for tuition and related expenses for higher education, for 2010 and 2011. Cost: $1.2 billion.
- A tax credit of up to $2,500 for students' higher education expenses. Cost: $17.6 billion.
- The top capital gains tax rate of 15%. Cost: $25.9 billion.
- The top tax rate on dividends of 15%. Cost: $27.3 billion.
- Through 2011, enhanced jobless benefits for people who have been unemployed for long stretches. Cost: $56.5 billion.
- A series of incentives for selling, using and producing alternative fuels, including ethanol. Many of the provisions expired at the end of 2009. They would be extended through 2011. Cost: $11.3 billion.
- A $250 deduction for out-of-pocket classroom expenses by teachers, for 2010 and 2011. Cost: $390 million.
- A federal income tax deduction for state and local sales taxes, taken mostly by people who live in the nine states without state income taxes, for 2010 and 2011. Cost: $5.5 billion.
- The ability of older Americans to withdraw up to $100,000 a year from Individual Retirement Accounts, tax-free, to donate to certain public charities, for 2010 and 2011. Cost: $979 million.
- A business tax credit for research and experimentation expenses, for 2010 and 2011. Cost: $13.3 billion.
- Tax breaks for capital improvements to restaurants and other retail buildings, for 2010 and 2011. Cost: $3.6 billion.
- A tax break for active investors in foreign-based banking, securities and insurance firms, for 2010 and 2011. Cost: $9.2 billion.
- Increased depreciation and expensing for capital investments by businesses. Cost: $21.8 billion.
The package also:
- Spares more than 20 million middle-income households from tax increases averaging $3,900 from the Alternative Minimum Tax in 2010 and 2011. Cost: $136.7 billion.
- Imposes a lower estate tax for the next two years, allowing couples to pass estates as large as $10 million to heirs tax-free. The balance would be taxed at 35 percent. Cost: $68.1 billion.
- Provides a one-year Social Security tax cut for all wage earners, from 6.2% to 4.2%. Cost: $112 billion.
Source: Joint Committee on Taxation.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Great news Social Security tax reduced for workers from 6.2% to 4.2 %.
Maybe that is not such a good idea.
The problem is we still have to pay the Social Security tab down the road. The system is unstable and by taking away some of its funding we will have to print and pay later. That seems to be the way of the world print and pay later.
I think that some people actually need the UC benefits - husband who was laid off gov't job staying home to take care of wife who was recently diagnosed with stage 4 cancer . I thought it was only available if you worked enough in a certain period of time and your previous job doesn't deny the claim?? Anyways, I think that they should kick the folks who have been on welfare for 3+ years, NEVER tried to get a job and continue to keep having children! You want to save some money, that's where you go. Half those folks lied to get it and they probably make more than the average working individual. My monthly income has been reduced to less than half with taxes and medical coverage! I have 2 kids and I never make any money back at the end of the year and yet those folks who haven't worked and are on assistance, claim 8 kids and they walk away with a check that could pay 1 yr of private high school. I understand that jobs are scarce and Iunderstand that everyone could use a little help once in a while but some of these folks just abuse the system and the gov't doesn't see it????
There is a lot wrong with this bill.
Did I read this correctly?
Wealthy get 92% of their income from capital gains and dividends and those are taxed at 15%!!!
"More generous itemized deductions for high income households"!!!
Come on ...at least be a little embarrassed.
(When my post has facts in them they are accused of being spam.)
The fact is I read and do research to learn what is really going on! This is not automated or spam, it's my info.
PEOPLE NEED TO GO TO WORK AND QUICK LIVING OFF THE GOV. I HAVE PICKED UP TRASH TO GET A CHECK. HAND UP NOT A HAND OUT HAVE SOME PRIDE.
Im amused at the bipartisan LOONS attacking Mike.
The problem is CONGRESS!
They should of learned long ago to establish Unemployment in such a way as to offer incentives to find work sooner rather then later. Various ways to do that...
But, even if you wanted to, McDonalds wont take you on because they get tax incentives to hire people that need to learn a work responsibility. Another Congress screwup.
Ive tried to get WA State to fix the flaws in their system when I ended up there after a near fatal accident. But, like Congress, deaf ears bought off by special interests rule Olympia.
Focus on the real target and change our flawed democracy. Maybe to TRIBAL ELDERS who serve single 5yr terms for only 7months/year, chosen from among the retired on Soc Sec: those who lived in the REAL WORLD!
PS to mike: make use of Craigslist Resume section...
This is supposed to be the worst recession in 80yrs. What makes you think that Mike is any different then the recession so long ago.
Having run a convenience store in a low income neighborhood in Portland, I learned the reality of how it works for those who keep America moving as labor and managers making less then $10/hr.
Now they are also talking about dunning taxpayers for that extra $8/wk they got to keep in their paychecks.
So, reducing SSec taxes will also likely to come back to get them the following year.
Again, Congress is the problem. Not the MIKEs of the US.
If you cannot find work after 99 weeks, I am sorry. Join the Armed Forces, or get a job at McDonalds. Unemployment was not meant to be welfare for the able bodied.
What will we do in a yeasr, extend it to a 4 year vacation? So many people leech off the rest of us. I am sorry but after 2 years, you are a leech...
Probably a democrart too...
Better think before commenting next time
Your attitude speaks for why you are unemployed
McDonalds is not a bad place to work!!!!
Income is not a cost. The only cost is jobless benefits. Government needs to end entitlement benefits. I did not work my butt off to give to others through taxes. I gave more to charity last year then VP Biden, but made significantly less. I don't mind helping others out, but I don't want to do it through my taxes.
Mike, I would not hire for one reason: You have been unemployed for two years. Sorry!
It's no longer government for the people, it's now government for the rich and special interests!
Better add, and the people who want something for nothing.
Us working class just pay in
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