Contact: Bill Rubin/Jacki Bradham, St. Croix EDC, 715-381-4383
Time for Holiday Cheer? Loss of Fiscal Responsibility? The Economy will Answer these Questions
The “Middle Class Tax Relief Act of 2010” was signed by President Barack Obama on December 17, 2010. The President’s signature comes after months of debate between the White House, Senate, and House of Representatives. In addition to extending tax cuts first enacted by President George W. Bush, the Bill introduces new tax incentives and extends jobless benefits. The tax package will cost an estimated $858 billion—$801 billion in a package of tax cuts and $57 billion for extended unemployment benefits.
Congressional action comes at a meaningful time for people, business, and industry. For individuals and families, the extension of lower taxes and estate tax relief will have beneficial impacts.
Many business and industry sectors hailed the action by Congress to pass the Act. Business groups including the National Retail Federation, National Association of Manufacturers, and U.S. Chamber of Commerce supported passage of the Bill. Jay Timmons, an executive vice president with the National Association of Manufacturers, spoke on behalf of his members and said, “These much-needed incentives will spur investment, economic growth and job creation.” Geoff Burr, of Associated Builders and Contractors (ABC) said, “These provisions will spur investment in equipment and encourage investment in business.”
There are investment incentives in the Bill, such as the extension of bonus depreciation and the extension of the once-expired R&D credit. Capital investments made in 2011 can be expensed at 100 percent. And don’t forget about tax relief for small businesses. Most of the provisions in the Act, which were scheduled to expire on January 1, 2011, would be extended for two years, unless noted otherwise.
Specifically, provisions in the Bill include:
– lower rates for taxpayers at every income level—the top rate remains at 35 percent (instead of increasing to 39.6 percent) and the bottom rate remains at 10 percent (instead of increasing to 15 percent) (cost: $186.8 billion);
– a one-year Social Security tax cut for all wage earners, from 6.2 percent to 4.2 percent (cost: $112 billion);
– for individuals, the top capital gains tax rate of 15 percent (cost: $25.9 billion);
– the top rate on dividends of 15 percent (cost: $27.3 billion);
– a business tax credit for research and experimentation expenses for 2010 and 2011 (cost: $13.3 billion);
– increased depreciation and expensing for capital investments by business (cost: $21.8 billion);
Source: MSNBC (Information is deemed accurate and reliable, but not guaranteed; business advisors should be consulted)
For additional information please a view a Summary of the Tax Cuts Compromise Package at http://www.stcroixedc.com/news_home/pr_taxcutsummary_10dec.pdf.
