Did the President compromise or was it a difference in opinion with Democrats? Is he playing arm-chair politics to jockey for position? Is there a difference between rich and poor, Rand Paul doesn’t think so? Is Mr. Obama a masterful chess player? Mr. Obama was placed in a dubious position and was caught between the proverbial rock and a hard place. It’s a no win for him. He’s catching it from both sides. This actually goes back to the Republican Revolution of 94′ when Bill Clinton was in the same predicament. He stood his ground so much he became Mr. No, and he and that  fig Newt Gingrich had to compromise so that they could work together. Even if you don’t use the word compromise, it’s still the same thing. With them working together it was the last time we had a balanced budget. Maybe the current sitting President should stand a little firmer. Let’s say he stood up to the opposition party and jockeyed for position and they still blocked everything and he got what was presented to him. He would be a hero. The “Left ” is split on whether to vote or not to vote. Let’s take a look, firstly, at what the great compromise consists of.

On December 9, 2010, the Senate Finance Committee released a summary of the proposed Tax Bill referred to as the **Reid Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the “Proposal”).

Here are some additional provisions:

>Extension of Current Tax Rates. The Proposal would continue the current 25%, 28%, 33% and 35% tax rates through 2012. Under current law, the highest marginal rate would have increased to 39.6% as of January 1, 2011.

>Extend Capital Gains and Dividend Rates. The Proposal would extend the maximum 15% capital gains and dividend rates for an additional two years, through 2012.

>Extend AMT Patch. The Proposal would increase the amount of the exemption from the Alternative Minimum Tax from $33,750 (individuals) and $45,000 (married filing jointly) to $47,550 (individuals) and $72,450 (married filing jointly) for 2010 and increase the exemption amount to $48,450 (individuals) and $74,450 (married filing jointly) for 2011.

>Estate and Gift Tax Reform. The Proposal sets the estate and gift tax exemption at $5 million per person ($10 million per couple) at a top tax rate of 35% for two years, through 2012. The Proposal would reunify estate and gift taxes for gifts made after December 31, 2010. Although the Proposal is effective January 1, 2010, estates could elect existing law (no estate tax and limited step-up in basis) before January 1, 2011.

>Extension of Bonus Depreciation. For assets placed in service after December 8, 2010 through December 31, 2011, the Proposal permits 100% bonus depreciation. For assets placed in service after December 31, 2011 through December 31, 2012, the Proposal would provide for 50% bonus depreciation.

>Extension of Increase in Section 179 Expensing. Under current law, a taxpayer may deduct certain property placed in service up to $500,000, which is subject to a phase-out if the property purchased by the taxpayer exceeds $2 million. The Proposal would extend these provisions through December 31, 2011.

>Extension of Treasury Grants under Section 1603. The Proposal would extend for one year the start of construction deadline for the cash grants in lieu of tax credit program established in Section 1603 of the American Recovery and Reinvestment Act.

>R&D Credit. The Proposal would reinstate the research credit for two years (2010 and 2011).

>15-Year Recovery Period for Leasehold Improvements and Restaurants. The Proposal would extend for two years (2010 and 2011) the special 15-year cost-recovery program for leasehold improvements, restaurant buildings and improvements and retail improvements.

>Extension of Expensing for Environmental Remediation Costs. The Proposal would extend for two years (2010 and 2011) the provision that allows expensing associated with cleaning up hazardous sites.

>Exclusion of Small Business Capital Gains. The Small Business Jobs Act of 2010 permitted a 100% capital gain exclusion for qualified small business stock. A qualified small business is a C corporation whose gross assets do not exceed $50 million. The amount of the gain subject to exclusion is the greater of 10 times the taxpayer’s basis or $10 million. The Proposal would extend the 100% exclusion for stock that is acquired before January 1, 2012 and is held for at least 5 years.

>Reduction in Employee-Paid Social Security. The Proposal would reduce the 6.2% social security taxes imposed on employees to 4.2% during 2011. The employer portion of social security taxes would be unaffected.

Overall it’s pretty much a disguised stimulus package.  A few questions? What happened to the deficit? What have the Bush-era tax cuts done for job creation or for that matter the economy? Are the tax payers on the lower echelon going to pay? I’ve read where some Democrats are blocking this bill because it will give more power to the Republicans. Some Republicans argue the opposite. No matter what the real issue is, I still believe overall it can be a win-win for both parties; but in the end politics will be the winner and the loser, the people who depend on, or need government.

Lastly, President Obama trotted out former President Bill Clinton. Much has been said about what happened, I won’t comment. The two men have a lot in common, they both share in losing the House of Congress though Obama did barely kept the Senate. Clinton didn’t inherit the same type of boondoggle as Obama. Clinton came in on a relatively small Fed-induced recession. The argument is that Clinton did not create an economy that conducive for job growth.

Obama had a housing bubble issue, the thing that people thought would be their nest egg imploded; it has yet to recover. The middle and working class used there houses like ATM machines. You saw the commercials, need college money: borrow. Need home improvements: borrow, about to retire: borrow. Need a great vacation: borrow. It’s all about the blame game, blaming big government, hell when has government been small?

**Source: Luce-Forward Law Firm

John Jones

The NON-Conformist