So What Exactly Is in the Tax Deal?

Republicans, Obama agree to payroll tax holiday, middle class breaks
By Kevin Spak,  Newser Staff
Posted Dec 7, 2010 7:43 AM CST
President Barack Obama makes statement in the Eisenhower Executive Office Building, part of the White House complex, Monday, Dec. 6, 2010.   (AP Photo/J. Scott Applewhite)

(Newser) – The tax cut deal President Obama struck with Republicans yesterday is far more sweeping than lawmakers on either side of the aisle were expecting, and aside from extending the Bush tax cuts across the board, here's the lowdown, as per the Washington Post:

  • Inheritance tax: After a year's lapse, individual estates worth more than $5 million (twice that for couples) are now subject to a 35% levy.
  • Payroll tax holiday: Will extend across all income levels, costing $120 billion. A couple making $70,000 a year will see $1,400 in savings.

  • Businesses: Will be able to deduct 100% of the cost of new investments for the next two years.
  • Stimulus extensions: Expanded versions of the college tuition deduction, child tax credit, and earned income credit will remain on the books.
  • Emergency unemployment benefits: A 13-month extension will affect 2 million workers set to be cut off by the end of the year.
  • The cost: A $700 billion tab billed to the national deficit.

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