Senate negotiators and President Obama reached an agreement on temporarily extending the Bush Tax Cuts for two years. Included with this will be two years of a $5 million estate tax exclusion with estates over this amount taxed at 35%. Also included was an extension of unemployment benefits.
There’s also a new tax reduction: The social security (FICA) tax one employees will be reduced for one year from 6.2% to 4.2%. The employers’ share would remain at 6.2%.
What was apparently agreed to is an outline; the exact details must still be worked out. Still, perhaps it’s a compromise both sides can live with. Or as Peter Pappas notes, perhaps its a measure that ideologues on both sides will reject. The very liberal wing of the Democratic party in the House is the most likely to balk at this agreement.
Still unknown at this point is the annual AMT patch and online gambling legislation. We’ll likely know more on both of these by week’s end.