NU Online News Service, Dec. 17, 3:17 p.m. EST
WASHINGTON–The House last night passed and sent to President Obama omnibus tax cut legislation that prolongs the
Bush-era tax cuts for at least two years.
Property and casualty insurance agents signaled strong support for the measure, H.R. 4853, and the Independent Insurance Agents and Brokers of America (IIABA) said it was "pleased" that the House had completed action.
Robert Rusbuldt, IIABA president & CEO, said, "Our economy is still recovering from a recession and without this legislation, small businesses like many independent insurance agencies and those that line Main Streets across America, would suffer the biggest tax hikes in recent history."
Charles E. Symington, IIABA senior vice president of government affairs, said the two-year extension of all current rates will help remove the uncertainty looming over the tax code, bolster our economy and allow small businesses to plan, hire and grow.
President Obama is scheduled to sign the bill at 3:50 p.m. from the White House.
The House passed the bill just before midnight. A vote originally scheduled for 3 p.m. was delayed after liberal Democrats tried to derail the bill by forcing reductions in the estate tax provisions.
Liberals in the party also wanted to limit the tax cut provisions so they would apply only to people who earn $1 million or less.
The House acted, 277-148, after first voting to reject an amendment that would have reduced the per-person estate tax exemption to $3.5 million and raised the maximum tax rate to 45 percent.
After the amendment was rejected, 194-233, the House then accepted the Senate version of the bill, which establishes a $5 million estate tax exemption and a maximum 35 percent tax rate.
The bill also reunifies estate and gift taxes, pushing the likely cost of the bill's provisions higher than the original Bush tax cut legislation–the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).
Prior to EGTRRA, the estate and gift taxes were unified, creating a single graduated rate schedule for both. That single lifetime exemption could be used for gifts and/or bequests. The EGTRRA decoupled these systems.
And, under the legislation, the estate tax exemption will be indexed for inflation starting in 2012.
Without this legislation, the estate tax was set to spring back to 2001 levels, with a $1 million personal exemption and a 55 percent top tax rate, in 2011.
The legislation would allow all businesses to expense 100 percent of their investments in 2011. The write-off would be retroactive to September 2010.
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