WASHINGTON (MNI) – The following is a summary, and statements,
regarding the agreement on tax cuts and unemployment benefits issued
Thursday by Ways and Means Ranking Member Dave Camp and Senate Finance
Ranking Member Charles Grassley:

Camp: “This agreement does two things the economy needs: prevents
a tax increase on all Americans who pay income taxes and provides a
foundation for job creation. The failure to move this agreement forward
will be a devastating blow to American taxpayers, small businesses and
our nation’s economic recovery.”

Grassley: “Raising taxes would be the worst thing we could do in
this economy. Continued tax relief gives people the ability to keep more
of their money to use as they see fit, whether it’s buying groceries or
investing in their small business. Sending more money to Washington
would just result in more government spending, which is the last thing
the country needs.”

Summary of Tax Hike Prevention Agreement

KEY POINTS:

* Prevents tax increases on every American who pays income taxes

* Eliminates job-killing tax increases on small businesses

* Provides relief from the estate tax for family owned businesses
and farms

* Preserves the $1,000 per child tax credit and marriage penalty
relief

* Blocks higher taxes on capital gains and dividends

* Protects at least 21 million households from being hit by the
AMT in 2010

* Replaces the stimulus bill’s Making Work Pay Credit with a
reduction in the payroll tax

KEY PROVISIONS:

Extension of All 2001 and 2003 Income Tax Provisions

* ALL of the 2001 and 2003 tax rates are extended for two years,
through the end of 2012. Had these provisions been eliminated, every
taxpayer would have faced higher taxes next year.

* In extending the 2001 and 2003 tax rates, the agreement also
preserves marriage penalty relief and the $1,000 per child tax credit,
which would have been reduced to $500 per child starting on January 1,
2011.

* The agreement blocks higher taxes on capital gains and
dividends, which stem from the sort of investments that grow the economy
and create good jobs. The provision maintains the current 15 percent
top tax rate on long-term capital gains and qualified dividends, which
otherwise would have risen to 20 percent and 39.6 percent, respectively,
in 2011.

Provides a Two-Year Fix for the Alternative Minimum Tax

* The agreement adjusts for inflation the Alternative Minimum Tax
(AMT) exemption amount for 2010 and 2011, and allows non-refundable
personal credits against the AMT.

* In 2010 alone, this ensures that at least an additional 21
million households will not be hit by the AMT.

Reduces the Sting of the Estate Tax

In 2011, the “Death Tax” would have gone to a top rate of 55
percent with a $1 million exemption.

* The agreement reflects the bipartisan Lincoln-Kyl compromise,
increasing the exemption to $5 million (indexed for inflation) and
reducing the top rate to 35 percent for 2011 and 2012 better
protecting family owned businesses and farms.

* Ten times the number of family-owned businesses and farms will
be hit by the estate tax without this measure.

Establishes a Payroll Tax Reduction in Place of the Making Work Pay
Credit

Under the agreement, the President’s signature Make Work Pay credit
is terminated.

* Instead, there is a 1-year payroll tax reduction that will
reduce the employee share of the payroll tax by almost one-third, by 2
percentage points down to 4.2 percent.

Renews “Traditional” Tax Extenders for Employers and Individuals

* The agreement extends through 2011 traditional tax extenders
on both the business side (like the Research & Experimentation tax
credit) and the individual side (like the deduction for state and local
sales taxes).

Creates a New Expensing Provision for Qualified Businesses

* The agreement allows businesses (1) to deduct immediately 100
percent of property placed in service between September 9, 2010 and
December 31, 2011; and (2) to take advantage of 50 percent bonus
depreciation in 2012.

Continues Select Refundable Tax Provisions

* At the President’s insistence, the package does extend a limited
number of refundable tax credits expanded or initiated in 2009 but
terminates many of the stimulus law’s most flawed and expensive
programs, such as the Build America Bonds program.

Extends the Federal Unemployment Insurance (UI) Program

* Renews the current Federal UI benefit programs for another 13
months through December 2011, and maintains the current cap of 99
weeks of total benefits.

** Market News International Washington Bureau: (202) 371-2121 **

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