Obama Signs $858 Billion Tax Cut Extension, Unemployment Benefits Into Law
President Obama signed an $858 billion measure that extends tax cuts for two years and unemployment benefits for 13 months on Friday afternoon. He hailed it as an important compromise between Republicans and Democrats and vital for the American people.
The Bush-era tax cuts were set to expire at the end of the year but now will be preserved until 2013.
"We are here with good news for the American people this holiday season," Obama said. "By a wide margin, both houses of Congress passed a package of tax relief that will protect the middle class, that will grow our economy and will create jobs for the American people."
As Neon Tommy previously reported, "The deal, which was struck by President Obama, Vice President Joe Biden and Republican leadership in the Senate, would extend the Bush tax cuts on individual income, capital gains and dividends for two more years. The legislation also imposes an estate tax of 35 percent on income above $5 billion. Democrats had sought to push that to 45 percent and lower the income threshold to $3.5 million. An amendment to make that change failed by about 20 votes in the House on Wednesday night...The debate about extending the tax cuts will come up again in the fall of 2012--about the same time Americans will have to decide on whether or not to re-elect Obama."
CBS News White House Correspondent Mark Knoller said on Twitter, "Obama uses a dozen pens to sign the bill. He says bill ensures millions of Americans will awake to a bigger paycheck on Jan 1."
Highlights of the $858 billion tax-cut package:
Income taxes: Extends Bush-era tax rates at all income levels. Cost: $186.8 billion
Alternative Minimum Tax: 20 million middle-income households spared AMT. $136.7 billion
Itemized deductions: More generous for high-income households. $20.7 billion
Standard deduction: Higher for married couples. $18 billion
Extension of sales-tax deductions: Washington residents take note. $5.5 billion
Payroll tax: Lowers Social Security tax from 6.2 percent to 4.2 percent in 2011. $112 billion
Estate tax: 35 percent tax, over $5 million/individuals, $10 million/couples. $68.1 billion
Child tax credit: Expands who can claim $1,000 credit. $71.7 billion
Jobless benefits: Up to 99 weeks, through 2011. $56.5 billion
Source: Joint Committee on Taxation