FSA spending time is here
Year-end retirement moves, Dec. 2010

Democrats agree to disagree on tax deal

I sit in front of a computer almost all of my waking hours, blogging, writing and surfing for tax news.

So I take one morning off to do another tax project (and then go to lunch with colleagues with whom I was working) and BOOM! Congress decides to do something!

OK. Congress didn't really do anything.

It was the House Democratic Caucus that decided not to back Obama on the deal he (via his tax task force) reached with the GOP on expiring tax rates.

Chile_Relleno About the time I was sitting down to my chile relleño at Manuel's (yes, it looked a lot like that one pictured at right; see why I wasn't in a hurry to get back to work!?), the Caucus went into closed-door session and held a non-binding vote on the tax proposal.

The verdict was a resounding thumbs down for the deal that would continue the Bush tax rates for all Americans regardless of how little or how much they make, as well as keep on the tax books some popular individual and business tax breaks and lessen the estate tax bite.

House Speaker Nancy Pelosi (D-Calif.) issued a statement after the vote noting that she and her fellow Democrats will fight to change the tax proposal.

"We will continue discussions with the President and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote," Pelosi said.

Good luck with that. Not only has the White House said it's a take-it-or-leave-it plan, House Republicans are pretty happy with the deal.

The Hill newspaper is keeping track of which Representatives will (or have said they will) vote for or against the tax deal.

So it looks like the president's hope that the compromise (or cave in, depending on your point of view) tax plan could be to him for his signature into law by this week will be dashed.

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I must say, I was flabbergasted at the proposal.
The estate tax - $5M/35%? This is better than the GOP asked for. $3M with the rate starting at 35 above that, and increasing to 50% at some level would have sufficed.
The payroll tax? 2% with no phaseout? I hadn't heard talk of this, it seemed to come out of nowhere. Now, being 48 with no hope of actually collecting SS at retirement, I should just be thankful to get this windfall. "Jane" works as well, so we are in for a double blessing.
If this passes.
It seems Obama just alienated his own party.
We'll expect you to break the news when something is finalized.

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