MIAMI (CBS4) – President Barack Obama’s tax-cut deal with the GOP leadership sailed through both houses of Congress, easily passing in the House of Representatives Thursday evening.
There’s a bevy of tax cuts South Floridians will enjoy that will be extended to benefit all tax brackets. The total bill will be roughly $858 billion, more than the GOP despised 2009 stimulus package.
This is how the tax cut deal that will be signed by the president breaks down:
The package extends:
- Lower rates for taxpayers at every income level. The top rate, on taxable income above $379,150, would stay at 35 percent, instead of increasing to 39.6 percent. The bottom rate, on taxable income below $8,500 for individuals and $17,000 for married couples, would stay at 10 percent, instead of increasing to 15 percent. Cost: $186.8 billion.
- More generous itemized deductions for high-income households. Cost: $20.7 billion.
- A more generous $1,000 child tax credit. Cost: $71.7 billion.
- Marriage penalty relief, increasing the standard deduction for married couples. Cost: $18 billion.
- A more generous Earned Income Tax Credit for low-income families. Cost: $15.7 billion.
- A series of tax breaks for students and their families, including interest deduction for student loans and an exemption for employer-provided educational assistance. Cost: $3.3 billion.
- A deduction for tuition and related expenses for higher education, for 2010 and 2011. Cost: $1.2 billion.
- A tax credit of up to $2,500 for students’ higher education expenses. Cost: $17.6 billion.
- The top capital gains tax rate of 15 percent. Cost: $25.9 billion.
- The top tax rate on dividends of 15 percent. Cost: $27.3 billion.
- Through 2011, enhanced jobless benefits for people who have been unemployed for long stretches. Cost: $56.5 billion.
- A series of incentives for selling, using and producing alternative fuels, including ethanol. Many of the provisions expired at the end of 2009. They would be extended through 2011. Cost: $11.3 billion.
- A $250 deduction for out-of-pocket classroom expenses by teachers, for 2010 and 2011. Cost: $390 million.
- A federal income tax deduction for state and local sales taxes, taken mostly by people who live in the nine states without state income taxes, for 2010 and 2011. Cost: $5.5 billion.
- The ability of older Americans to withdraw up to $100,000 a year from Individual Retirement Accounts, tax-free, to donate to certain public charities, for 2010 and 2011. Cost: $979 million.
- A business tax credit for research and experimentation expenses, for 2010 and 2011. Cost: $13.3 billion.
- Tax breaks for capital improvements to restaurants and other retail buildings, for 2010 and 2011. Cost: $3.6 billion.
- A tax break for active investors in foreign-based banking, securities and insurance firms, for 2010 and 2011. Cost: $9.2 billion.
- Increased depreciation and expensing for capital investments by businesses. Cost: $21.8 billion.
The package also:
- Spares more than 20 million middle-income households from tax increases averaging $3,900 from the Alternative Minimum Tax in 2010 and 2011. Cost: $136.7 billion.
- Imposes a lower estate tax for the next two years, allowing couples to pass estates as large as $10 million to heirs tax-free. The balance would be taxed at 35 percent. Cost: $68.1 billion.
- Provides a one-year Social Security tax cut for all wage earners, from 6.2 percent to 4.2 percent. Cost: $112 billion.