(Via Bloomberg) President Obama signed into law an $858 billion bill extending Bush-era tax cuts to boost a fragile economy and add jobs. “Putting more money in the pockets of families most likely to spend it, helping businesses to grow, that’s how we’re going to spark demand, spur hiring and strengthen our economy in the new year,” Obama said at a signing ceremony in Washington.
The President had to overcome significant resistance among both Democrats and Republicans who were opposed to the bill. He signed the measure after meeting privately with about a dozen labor leaders, including AFL-CIO President Richard Trumka. Organized labor leaders opposed the tax-cut deal. “Candidly speaking, there are some elements of this legislation that I don’t like,” Obama said. “That’s the nature of compromise.”
I’ve summarized below what you need to know about the bill and how it applies to you:
· The tax-plan expands aid to the long-term unemployed for 13 months and reduces payroll taxes for workers by two percentage points during 2011
· Many economists and law-makers warned that failure to pass the bill would “possibly send us back into a double-dip recession” [Repub. Rep Eric Cantor, VA]
· Gus Faucher, director of macroeconomics at Moody’s Analytics, predicts that because of the bill unemployment will be lower in 2011, averaging 8.7 percent versus 9.8 percent (its most recent record in November of this year)
· Under the plan, the estate tax next year would have a top rate of 35 percent to be applied after an exemption of $5 million per person
· The plan extends all Bush-era tax rates through 2012, guaranteeing a fight over taxes during that year’s presidential campaign.
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