More On Tax Planningfrom The Advisor's Professional Library
- Cafeteria Plans The income tax treatment of cafeteria plans is key to their popularity. Learn how to maximize the tax benefits of these “flexible benefit plans”.
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
Democrats rose up in anger following President Barack Obama's announcement on Monday that he would go along with Republican demands to extend the Bush tax cuts, but Obama insisted he was not going to "play games" with the economy.
In a press conference on Tuesday, Obama told reporters that a "long political fight that carried over into next year might have been good politics, but it would be a bad deal for the economy and it would be a bad deal for the American people."
Democratic senators have been vocal about their disappointment, though.
Sen. Frank R. Lautenberg, of New Jersey, said, “I think a ransom was paid, and it was a very high price," according to The New York Times, while Sen. Mary Landrieu, D-La., despite supporting the original cuts in 2001, called the extension "nonsensicalness."
Vice President Joe Biden approached Democratic senators with the bill on Tuesday, and is expected to talk to House Democrats on Wednesday, Reuters reports.
A senior House Democratic aide told Reuters, "There are a lot of Democrats unhappy with the tax deal. Biden will have a lot of explaining to do."
Sen. Harry Reid, however, indicated the proposal may move more quickly than expected, Reuters reported, a turnaround from his earlier comments describing the plan as no more than a "framework."
"It's further along than most people think," he said. "I don't think there is a great more to be done on that."
A Bloomberg National Poll found one-third of Americans don't support lower tax rates for the highest earners; one-third say only the middle class cuts should be extended; and one-fourth say all tax cuts should expire on Dec. 31.