What Will Be in the Final Tax Cut Bill

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NEW YORK (MainStreet) — The Senate will hold a preliminary vote Monday afternoon to determine whether or not there is enough support to extend tax cuts for all Americans for two more years. If the majority of votes are in favor of the proposal, as most expect they will be, the Senate could vote to approve the bill as soon as Tuesday. That would clear the way for a final vote in the House of Representatives later this week.

Even as the deal brokered between the White House and the Republican leadership last week moves closer to approval, the Obama administration continues to face tough criticism from Democrats who view the compromise as being too generous to Republican demands and too fiscally irresponsible for the country. To combat this perception, the White House recently released the above chart to highlight the Democratic initiatives in the bill, which far outnumber those of Republicans.

According to the White House, the only two proposals in the current compromise that meet Republican goals are tax cuts for the wealthiest Americans and an estate tax cut. By comparison, Democrats–and working families in general–will see many more of their priorities enacted, including a child tax credit, a 13-month unemployment benefit extension, a payroll tax cut and of course an extension of tax cuts for the middle class as well. In fact, more than two thirds of the spending from the bill will go to Democratic initiatives.

Looking at this breakdown, it’s easier to understand why the White House agreed to sign off on the proposal. But whether or not you agree with the administration’s point – that Democrats did not get the short end of this stick on this bill – the chart also proves to be a good reminder for other initiatives in the bill, which have received less attention in the press.

If passed, this tax cut deal would temporarily let millions of businesses nationwide expense 100% of their investments next year, making them tax deductible, so these businesses can expand and create new jobs. Or there’s the proposal in the bill that would create a new tax credit for families looking to send their kids to college.

Taken together, there’s no doubt that the middle class will undoubtedly be in better shape with these measures than without them, even if the national deficit suffers as a result.

"I am having a hard time paying my bills right now as it is," wrote Scott Serene, who blogs at ThisDaddysBlog.blogspot.com and is one of our Voices of MainStreet. "We have made huge changes to how we live and what we do for the kids based on that pay cut I took. I don’t know how in the world I would ever be able to support a family of six on my salary without the tax cut being extended."

However, as we’ve noted before, some of the cornerstone proposals in this package, including the middle-class tax cuts and the unemployment benefits, are not quite as good as they may initially seem.

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