Tax Cuts

This whole idea of having a more bipartisan Congress come January and a President who is trying to get along better with some of the incoming members could turn out to be a good thing for the country. This week's tentative agreemen to extend the Bush tax cuts for both the middle class and the wealthy has got the far left threatening to not go along with the deal before they leave office.

But, on Tuesday, I thought our President finally got it. The election results last month reflected an overwhelming desire to push out the most liberal lawmakers. If you didn't see the impromptu news conference, you missed President Obama as the salesman -reminding those who got voted out that they better go along with the new majority because that's what voters want.

Plus, democrats got their extended unemployment benefits for another 13 months. Without this agreement, another seven million workers would have lost their benefits in the coming year. And, for every dollar received in unemployment benefits, about $1.90 is spent back into the economy. After all, those who are not working need money the most to buy the basic necessities. The only part of the unemployment program that I don't like is when people who have been jobless for more than two years are still milking the system.

Other parts of the tentative agreement include a two percentage point decrease in employees' Social Security payroll taxes in 2011 that will be put back into workers' paychecks. It will also allow businesses to completely write off 100 percent of their capital purchases next year. The agreement's most contentious issue relates to adjusting the estate tax to 35 percent for two years on assets of $5 million or more. Last year, the threshold for estate taxes was $3.5 million and the rate was 45 percent.

All in all, it seems like our President is getting the message. And, frankly, I couldn't care less what Democratic Congresswoman Nancy Pelosi and her group think of this agreement. I just hope that they don't kill the bill before the end of the year.

President Obama says he is all about compromise now. Of course, let's see how everything shakes out when it comes to the health care debacle.

REMINDER: After next week's issue (Dec. 17, 2010), there will be no more editions of The Bottom Line until Jan. 7, 2011, since Ropa Publishing Co. takes two weeks off during the Christmas and New Year's holidays.