I was struck this morning watching various Democratic congressmen on CNBC denounce the tax compromise by how little they hold themselves responsible for the situation we”re in. Vitriol, class warfare, and victimhood were key elements of their statements. It was like watching a soap opera titled “The Corrupt and the Clueless”. Americans are very concerned about the deficit and the level of debt, and not just at the federal level. In my opinion, the main lesson from the November election is that Americans don”t have confidence in politicians to take even more of their money and spend it wisely.
The still needs to pass Congress, but at first glance it will remove some of the uncertainty that has been holding back business investment.
Here are the key provisions as outlined by Fidelity Capital Markets:
Unemployment Insurance: 13-month extension of unemployment benefits.
Business Expensing: 100% expensing of capital investments in 2011 and possibly 50% expensing in 2012.
Annual Expiring Tax Provisions. A two-year extension of the “traditional” expiring tax provisions, such as the active financing exception, R&D credit, tax-free IRA distributions for charitable purposes, and the tax treatment of qualified interest income from RICs.
Expiring Stimulus Provisions. The framework contemplates a 2-year extension of the individual tax credits enacted in the 2009 stimulus bill, such as the enhanced Earned Income Credit, child credit, and education tax incentives. However, extension of other stimulus provisions, such as the Build America Bonds program, is still under discussion.
AMT Relief: 2-year extension (through 2011) of the AMT “patch” relief.
