After weeks of negotiations on Capitol Hill, today the House and Senate passed the Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) – extending payroll tax cuts through the end of the year. And earlier this month, President Obama proposed his federal budget plan for fiscal year 2013.
CCH, a Wolters Kluwer business, has issued two new tax briefings that thoroughly examine and clarify the details of each.
CCH’s Tax Briefing on newly passed legislation that extends payroll tax cuts through 2012 examines the specific provisions lawmakers on both sides of the aisle agreed upon following a lengthy debate. In-depth explanations and analysis are provided on how the estimated $93.2 billion cost of the tax cut extension is being covered without new revenue-raising provisions.
Another new CCH Tax Briefing looks at the President’s budget proposal, which includes plans for reducing the federal deficit by $4 trillion, raising revenues by nearly $1.5 trillion by allowing Bush-era tax cuts to expire for higher income taxpayers, as well as closing a host of loopholes and tax preferences. The President’s budget also includes many tax incentives for both individuals and businesses. They range from extending enhanced higher education credits and child care deductions, to rolling out a new manufacturing communities tax credit, new tax incentives for insourcing jobs and a permanent zero-percent capital gain rate on investments in qualified small business stock. The President’s budget also proposes a budget for IRS operations of almost $1 billion, an 8-percent jump over 2012 levels.
“The White House estimates that taxpayers will see an average increase of $1,000 in take home pay with the payroll tax cut extension,” said George Jones, JD, CCH Senior Federal Tax Analyst. “Although it’s been a busy month for tax proposals affecting individuals, we’re not seeing much in the area of corporate tax reform yet and the size of the reduction in the corporate tax rate that the President may propose is still unclear; however, Treasury Secretary Geithner has promised to unveil details on the Administration’s vision of corporate tax reform soon, so stay tuned,” said Jones.