help for rich and poorWASHINGTON — President Barack Obama signed into law a huge tax bill extending cuts for all Americans on Friday, saluting a new spirit of political compromise as Republicans applauded and liberals seethed.
The benefits range from tax cuts for millionaires and the middle class to longer-term help for the jobless.
The most significant tax legislation in nearly a decade will avert big increases that would have hit millions of people starting in two weeks on New Year’s Day. Declared Obama: “We are here with some good news for the American people this holiday season.”
“This is progress, and that’s what they sent us here to achieve,” Obama said as a rare bipartisan assembly of lawmakers looked on at the White House.
The package retains Bush-era tax rates for all taxpayers, including the wealthiest Americans, a provision Obama and congressional liberals opposed. It also offers 13 months of extended benefits to the unemployed and attempts to stimulate the economy with a Social Security payroll tax cut for all workers.
At a cost of $858 billion over two years, the deal contains provisions dear to both Democrats and Republicans. It represents the most money that Obama was likely to have been able to dedicate over the next year to the slowly recovering economy. Yet it also increases the federal deficit at a time when the country is growing increasingly anxious about the red ink.
Obama called for maintaining the spirit of cooperation, declaring he was hopeful “that we might refresh the American people’s faith in the capability of their leaders to govern in challenging times.”
He conceded that the White House and Congress face a difficult challenge when it comes to controlling the deficit and tackling the nation’s debt.
“In some ways this was easier than some of the tougher choices we’re going to have to make next year,” he said.
Conspicuous by their absence at the ceremony were House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, a reflection of the sharply divided sentiment about the bill in the Democratic caucus.
Republicans boasted that their success in extending tax cuts for all was a sign of things to come.
“The American people are seeing change here in Washington; they can expect more in the new year,” said Senate Republican leader Mitch McConnell, who was singled out for praise by Obama.
Liberals, unable to alter the plan, were left bristling.
They especially objected to the new estate tax, which will allow the first $10 million of a couple’s estate to pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
Examples of savings for taxpayers
The Tax Institute at H&R Block developed estimates for how the new law will affect families at various income levels next year:
• A single taxpayer making $50,000 a year who rents an apartment and pays $3,500 in college tuition and fees would save $2,280 in income taxes and $1,000 in Social Security taxes — a total of $3,280.
• A married couple with two young children, some modest investments and combined wages of $100,000 would save $6,256 in income taxes and $2,000 in Social Security taxes — a total of more than $8,200.
• A married couple with a child in high school and another in college, combined wages of $170,000 and larger investments would save nearly $7,800 in income taxes and $3,400 in Social Security taxes — a combined savings of nearly $11,200.
The Associated Press
