(Dan here: I am traveling right now and am posting things late or maybe not as tidy as I would like. But posts are coming.)
by Linda Beale
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 passes
crossposted with Ataxingmatter
No big surprise here. The House on December 16 passed the Senate-approved TRA by a vote of 277-148, clearing it for the President’s signature. The bill extends the Bush tax cuts for two years and reduces the number of estates subject to the estate tax, and the rate of tax when they are taxed, even below the number subject to the tax in 2009. It includes the usual “patch” for the AMT for two years, and various tax breaks for businesses–especially expensing provisions that will likely merely result in more pay to managers and more payouts to mostly wealthy shareholders.
Those most vulnerable get the relief from the lower rates (not many dollars for them, of course), the 2% cut in the payroll taxes, and the extension of unemployment compensation.
Those at the top of the wealth and income heap who have garnered almost all the benefits of productivity gains in the economy over the last few decades get most of the benefit of the bill–tens of thousands of dollars of tax relief for the top 20% of the income distribution, substantial estate tax reductions, and none of the burden-sharing that progressives had advocated (such as the carried interest treatment as ordinary income). The bill even provides what amounts to an interest-free loan to the wealthy who convert regular IRAs to Roth IRAs–the “deal of the century” according to one CPA who services the wealthy. See Leondis, Tax Measure Gives Deal to Wealthy Roth IRA Converters, Bloomberg.com, Dec. 17, 2010. And of course, the bill also lets the wealthy transfer up to $100,000 from regular IRAs to charities without paying the income tax they should have to pay on the appreciation.
All in all, the wealthy made out like bandits in the tax bill. And in many ways, that is the appropriate way to view them–they have stolen the sustainable livelihood of the middle and lower classes for two decades and are rapidly moving into position to become a ruling oligarchy. The bill was a big win for corporatism and the wealthy on the right.