Source: Press TV
http://www.presstv.ir/usdetail/181729.html
Highlights
The U.S. Congress and President Barack Obama approved an $858 billion tax deal in December 2010 that critics say would add to the budget deficit. Obama Stimulus Benefits
The tax law extended tax rates for all income groups, including the wealthiest top 2 percent. Reuters
More than half of the total benefit from the tax cuts in 2010 alone will accrue solely to the richest 5 percent of Americans while the middle 20 percent of Americans will reap only 7 percent of the benefit. American Progress
Some economists say extending the tax cuts for the wealthy will cost about $80 billion by the end of 2012. American Progress
Taxation
The U.S. Congress and President Barack Obama approved an $858 billion tax deal in December 2010 that critics say would add to the budget deficit. Obama Stimulus Benefits
The tax law extended tax rates for all income groups, including the wealthiest top 2 percent. Reuters
Most Democrats favored extending the lower rates for household income of up to $250,000 only. Republicans wanted to retain the cuts for everyone including wealthier Americans. Reuters
More than half of the total benefit from the tax cuts in 2010 alone will accrue solely to the richest 5 percent of Americans while the middle 20 percent of Americans will reap only 7 percent of the benefit. American Progress
Some economists say extending the tax cuts for the wealthy will cost about $80 billion by the end of 2012. American Progress
Tax deal details
Individual income and investment taxes
In the tax deal, the cost of keeping tax rates for the middle and lower income groups is $127 billion. Also the cost to retain the top two income tax rates Obama originally opposed is $61 billion. CNBC
The tax deal keeps capital gains and dividends taxed at a top rate of 15 percent. Obama and Democrats had sought a 20 percent top rate, costing $54 billion. CNBC
The tax deal repeals certain limitations on deductions for high-earning individuals, costing $21 billion. CNBC
The tax deal extends a $2,500 annual college tax credit, favored by Obama, for two years, costing $18 billion. CNBC
The tax deal extends a $1,000 child tax credit, which phases out at higher incomes, for two years, costing $72 billion. CNBC
The tax deal boosts earned income tax credit, which benefits low-earning working individuals, costing $12 billion. CNBC
Estate tax
Obama conceded to Republican demands on the estate tax - 35 percent after a $5 million individual exemption. CNBC
That level was originally pitched by Republican Senator Jon Kyl. Obama and Democrats had wanted to renew the tax at 2009 levels of 45 percent rate with a $3.5 million exemption level. The estate tax expired 2010. Cost: $68 billion. CNBC
Unemployment insurance
The deal extends long-term unemployment insurance for 13 months, without a requirement that it be paid for immediately as Republicans have demanded. CNBC
Jobless benefits usually expire after six months, but since the recession took hold in 2007 Congress has voted to extend them for up to 99 weeks. CNBC
Cost: $57 billion, according to the Congressional Budget Office. CNBC
Alternative minimum tax
The deal amends the alternative minimum tax by indexing it to inflation to prevent more than 20 million middle-class taxpayers from getting hit with the tax, intended to ensure the wealthy pay some income taxes. Cost: $137 billion. CNBC
Expensing for business
The deal lets businesses of all sizes write off investments faster in 2011. This benefits capital-intensive companies the most. Cost: $21 billion. CNBC
Payroll tax credit
Employers and workers each pay a 6.2 percent payroll tax, which funds Social Security. The bill lowers the rate for workers to 4.2 percent for one year. CNBC
The Social Security Trust Fund would be paid back by a transfer of general funds. Cost: $111 billion. CNBC
Additional industry tax breaks
The deal extends a 45-cent-per gallon tax credit for ethanol for one year and a 54-cent tariff on imported ethanol. Cost: $7 billion. CNBC
The deal revives for 2010 and extends a research and development tax credit to 2011. Cost: $13 billion for two years. CNBC
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