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Financial Planning > Tax Planning

Obama Tax Cut Bill Clears Key Senate Vote

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The Senate passed in a procedural vote on Monday the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extends the Bush-era tax rates for two years and extends unemployment benefits for 13 months. The vote was 83-15. Cloture votes need only 60 senators to agree to cut off debate and allow a bill to proceed to a floor vote.

The final vote on the bill in the Senate is expected on Dec. 14. While House passage of the bill will be tougher, and is needed before the bill can be passed into law, House Majority Leader Steny Hoyer (D-Md.) said in comments at The National Press Club in Washington on Monday that he hoped to finish work on the legislation by the end of the week. He said in his comments that House Democrats will likely have a chance to make changes to the bill passed by the Senate and that both the House Ways and Means and Rules committees would consider the legislation before it comes to the House floor.

In comments before the vote, Mitch McConnell (R-Ky.), minority leader, said on the floor of the Senate that he will “vote for this bill and urge my colleagues in the Senate and the House to do likewise,” referring to the tax cut bill, H.R.4853.

The bill, introduced by Senate Majority Leader Harry Reid (D-Nev.) on Thursday, Dec. 9, is the result of a compromise between McConnell and Senate Republicans and President Obama under which the Bush-era tax rates on everything from income to capital gains to the estate tax will be extended, while unemployment benefits will also be extended.

“There are parts of this bill I don’t like,” McConnell (left) admitted in his remarks to the Senate, but called the “bipartisan compromise…an essential first step” in addressing the budget deficit. He also warned that raising tax rates for higher-income Americans would be a misstep. “No one ever created a job,” he said, “by punishing the job creator.”

McConnell characterized the Dec. 13 vote as a “step in the right direction; unless we move [the political debate] to pivot at the deficit, we’ll only move it down the road,” but said that with this bill, “We’ve laid the groundwork.”


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