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December 15, 2010 in Business, Nation/World
Senate passes package extending Bush tax cuts
WASHINGTON — The Senate today overwhelmingly passed a sweeping tax package that would save millions of Americans thousands of dollars in higher taxes while also reducing their Social Security taxes and extending jobless benefits.
The $858 billion package now goes to the House, where many Democrats are unhappy with a provision that allows estates as large as $10 million to pass to heirs tax-free. Democratic leaders, however, say they expect the bill to ultimately pass and become law.
A wide array of tax cuts enacted under President George W. Bush is scheduled to expire on Jan. 1 — just two weeks away — affecting taxpayers at every income level. The bill passed by the Senate, 81-19, would extend them for two years.
President Barack Obama urged quick action in the House.
“I know there are different aspects of this plan to which members of Congress on both sides of the aisle object. That’s the nature of compromise,” the president said. “But we worked to negotiate an agreement that’s a win for middle-class families and a win for our economy, and we can’t afford to let it fall victim to either delay or defeat.”
House Democratic leaders said they expect to vote on the bill Thursday.
Obama negotiated the package with Senate Republicans, and then administration officials worked for days to persuade congressional Democrats to support it, signaling a possible blueprint for future legislation. Because of November’s election victories, Republicans will take control of the House in January and gain seats in the Senate.
“Middle class families need a boost in this economy, and that is exactly what this plan gives them,” said Senate Majority Leader Harry Reid, D-Nev. “It is not perfect, but it will create 2 million jobs, cut taxes for middle class families and small businesses, and ensure that Americans who are still looking for work will continue to have the safety net they rely on to make ends meet.”
The bill would extend expiring tax cuts at every income level. It also would renew a program of jobless benefits for the long-term unemployed that is due to lapse, and enact a one-year cut in Social Security taxes. The bill’s cost, $858 billion, would be added to the deficit.
“Opposing this bill is tantamount to supporting massive tax increases that threatens our economic future,” said Sen. Orrin Hatch, R-Utah. “Allowing middle-class families, small businesses and investors to keep more of what they earn, while denying Washington hundreds of billions in new tax revenue to spend, is the right thing to do.”
Other Senate Republicans, however, balked at the price tag, noting that Obama’s deficit commission recently outlined the massive fiscal problems facing the nation.
“The American people are going to be looking, and they’re going to say, does the Senate get it? Do they understand the severity and the urgency of the problems that face our fiscal future?” Sen. Tom Coburn, R-Okla., said today.
At the insistence of Republicans, the plan includes a more generous estate tax provision: The first $10 million of a couple’s estate could pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
The lower estate tax infuriated some Democrats who were already unhappy with Obama for agreeing to extend tax cuts for individuals making more than $200,000 and couples making more than $250,000.
“This administration fights for nothing,” said Rep. David Wu, D-Ore.
The estate tax was repealed for 2010. But under current law, it is scheduled to return next year with a top rate of 55 percent on the portion of estates above $1 million — $2 million for couples.
House Democratic leaders want to bring back the 2009 estate tax levels. That year, individuals could pass $3.5 million to their heirs, tax-free. Couples could pass $7 million, with a little tax planning, and the balance was taxed at a top rate of 45 percent.
House Democrats said they are considering a vote to impose the higher estate tax, perhaps as an amendment to the package. But even critics of the lower estate tax say they expect the package to be enacted without changes.
“Let’s find out if Republicans really want to jeopardize income tax, payroll tax and estate tax relief for every American in order to provide a budget-busting bonanza to the country’s richest estates,” Rep. Chris Van Hollen, D-Md., wrote in an op-ed in today’s Washington Post. “House Democrats think this trade-off should be debated and voted on in the light of day.”
Rep. Bill Pascrell Jr., D-N.J., said, “We can jump up and down all we want about the higher-end estate taxes, and I don’t think anything’s going to change because the Senate isn’t going to change it.”
Thirty-one members of the conservative Blue Dog Democrats sent a letter to House Speaker Nancy Pelosi urging quick passage of the bill.
“It is time for us to put aside the partisan talking points and accomplish what the American people sent us here to do,” said the letter.
© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Life and debt 
hawken on December 15 at 10:54 a.m.
The biggest act of robbery by the liberals and RINO Republicans is the inheritance tax.
Families work a lifetime, successfully building wealth, which everyone would do if the had the capacity.
Then when the successful die, the government seizes 35-45% of their estate…. after,,,, after,,,, the same assets have already been taxed.
Then, the government takes ANOTHER 35-45% when the inheritance is passed to the next generation of the family.
And then, the robbery is continued, each time family assets are passed to the next generation….. until it is all gone.
Absolute, immoral, robbery and seizure of personal property and assets by the government. Indefensible, Vampire government!
johnclarke on December 15 at 11:11 a.m.
http://www.cbpp.org/files/estatetaxmyths.pdf
Without wasting too much time trying to educate Hawken (yet again) I’d like to provide the above link for the facts. The progressive estate tax was first endorsed by Theodore Roosevelt (a Republican) and currently affects around .3 % of all estates. The percentage actually paid is less than 20% on average due to estate planning and other tax shielding techniques. So, of that tiny percentage of estates in 2009, right around 80 small businesses and farm estates will owe any estate tax. I could go on, but read for yourselves. Yet another right wing myth - mythbusted.
greenlibertarian on December 15 at 11:52 a.m.
Paris Hilton types must be so happy.
*precedes) “Adam Smith taught the students who attended his jurisprudential lectures that “there is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death.” He thought inheritance was clearly justified only when it was necessary to provide for dependent children.
Among those who attended Smith’s lectures was the historian and jurist John Millar, who supported a change in the inheritance laws such that wills would be enforced only for a limited part of a person’s property. Millar saw this as entirely compatible with a respect for property rights. He was joined in this, as in his enthusiasm for Smith, by Tom Paine.
And Thomas Jefferson, who described “The Wealth of Nations” as “the best book extant” on political economy, famously wondered at about the same time whether all hereditary privileges should be abolished since “the earth belongs in usufruct to the living.” He could have been quoting Smith with those words: It is “the most absurd of all suppositions,” said Smith, “that every successive generation of men have not an equal right to the earth.” (continues)
http://www.salon.com/news/politics/feature/2001/02/15/estate_tax
(precedes)”The nation’s founders and populace viewed excessive concentrations of wealth as incompatible with the ideals of the new nation. Revolutionary era visitors to Europe, including Thomas Jefferson, John Adams, and Ben Franklin, were aghast at the wide disparities of wealth and poverty they observed. They surmised that these great European inequalities were the result of an aristocratic system of land transfers, hereditary political power, and monopoly.
Monarchies and hereditary aristocracies mocked the republican principle of self-government. Writing in Common Sense, Thomas Paine attacked the notion of hereditary government: “To the evil of monarchy we have added that of hereditary succession; and as the first is a degradation and lessening of ourselves, so the second, claimed as a matter of right, is an insult and imposition on posterity.”
In two other articles, “Rights of Man” and “Agrarian justice,” Paine extended his contempt of inherited political power to a critique of inherited economic power. Paine proposed an inheritance tax that would fund an early version of Social Security.
The distrust of concentrated wealth was so great that, in an extreme sentiment, Ben Franklin argued “that no man ought to own more property than needed for his livelihood; the rest, by right, belonged to the state.”“(continues)
http://www.tompaine.com/Archive/scontent/7082.html
mikemcdonnell on December 15 at 1:04 p.m.
So How Did the Bush Tax Cuts Work Out for the Economy, You and Me?
The 2008 income tax data are now in, so we can assess the fulfillment of the Republican promise that tax cuts would produce widespread prosperity by looking at all the years of the George W. Bush presidency.
Just as they did in 2000, the Republicans are running this year on an economic platform of tax cuts, especially making the tax cuts permanent for the richest among us. So how did the tax cuts work out? My analysis of the new data, with all figures in 2008 dollars:
Total income was $2.74 trillion less during the eight Bush years than if incomes had stayed at 2000 levels.
Average incomes fell. Average taxpayer income was down $3,512, or 5.7 percent, in 2008 compared with 2000, President Bush’s own benchmark year for his promises of prosperity through tax cuts.
Had incomes stayed at 2000 levels, the average taxpayer would have earned almost $21,000 more over those eight years. — http://tiny.cc/la63czz62v
greyhound2 on December 15 at 2:08 p.m.
According to a Pew report, 80% of the population lives on 15% of the wealth available. Most of that is 3rd generation inherited. The Golden Rule wins again, “He who has the gold rules”.
johnclarke on December 15 at 2:48 p.m.
Geez Hawken, no snappy reply? No links to reports or evidence? We are all waiting for your evidence supporting your statements above. Please, enlighten us all.
hawken on December 15 at 3:01 p.m.
Here you go Clarke and other uninformed….
“House Majority Leader Steny Hoyer, D-Md., said earlier this week that Democrats may try to amend the estate tax portion of the bill to reflect a House measure approved in 2009 that would set the rate at 45% and the exemption at $3.5 million.”
http://www.investmentnews.com/article/20101215/FREE/101219956
hawken on December 15 at 3:05 p.m.
I failed to post this on the Senate Democrat side….
“Most House Democrats, however, are resisting the estate tax portion of the bill, which would set the rate at 35% with a $5 million exemption. It also would provide for a “step-up” in basis for the valuation of inherited assets.”
http://www.investmentnews.com/article/20101215/FREE/101219956
Precisely my numbers above…. 35-45%
johnclarke on December 15 at 3:13 p.m.
As usual, no facts just statements. You are not even making this hard Hawken. *yawn*
mikeln on December 15 at 6:51 p.m.
Our founding fathers knew by passing on great wealth to ones heirs would lead to the kind of government that has developed in this country. We are no longer a democrasy or a republic, our elections are fixed and people other then our elected officials make the decisions. The government of the people has no voice, and if we yell too loud they would not hesitate to gun us down. We need to stand united and remove all of them from power, but just like in the commie hand book, divide and conquer has worked quite well for them and they are winning.