Monday, December 06, 2010

Obama and GOP Reach Deal on Tax Cuts: At Long Last!

There might even be some goodies in this deal for regular middle class people like myself.

"For next two years, every American will keep their tax cuts," Obama said. Other provisions of the expected legislation, including the extension of unemployment benefits for another 13 months, a one-year reduction in the payroll Social Security tax rate to 4.2% from 6.2%, and a provision for businesses to write off all investments for the next year, the president said.

That payroll tax cut rate change is like a 2% raise for every working American right off the top. Now that may actually be stimulative to the economy since more Americans will feel a 2% raise then not. I would much rather they were cutting it from 6.2% to 0% but this should be a good enough start.

That second thing about writing off all investments sounds pretty good as well. I wonder if businesses with an overseas arm can now repatriate their profits tax free or not. In any case 2011 will be a good time to build a new factory or expand to another city if they haven't already done so.

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