Iowa Public Television


Bush Tax Cuts Extended Bringing Benfits to Farm Country

posted on December 17, 2010

Hello, I'm Mark Pearson. Government reports this week painted a more positive outlook for the U.S. economy, leaving analysts cautiously optimistic for an economic rebound -- albeit modest -- in 2011.

According to the Commerce Department, retail sales rose 0.8 percent in November to post their fifth consecutive monthly increase. Department stores led the way with a 2.8 percent gain, the largest for that category since November of 2008. Days after the government released its figures, the National Retail Federation predicted holiday sales would amount to $451 billion this season -- -- virtually identical to those posted in 2007, prior to the Great Recession.

Those brave enough to venture to the mall in the waning days before Christmas likely will find some pretty good buys... The Labor Department says its Consumer Price Index rose just 0.1 percent last month. And over the past year, prices are up only 1.2 percent.

And the beleaguered housing sector flashed a glimpse of recovery this week when the government reported builders broke ground on nearly 4 percent more homes in November than in the previous month.

Despite the upbeat reports, high unemployment continues to weigh heavily on the U.S. economy. Hoping to speed the recovery, Congress worked well into the evening Thursday on legislation extending long-term unemployment benefits and tax cuts.

Bush Tax Cuts Extended Bringing Benfits to Farm Country A controversial compromise to extend Bush-era tax cuts for millions of taxpayers won overwhelming bipartisan approval in the Senate on Wednesday.

Senate floor "The yeas are 81. The nays are 19. The motion is agreed to."

After encountering a procedural snag Thursday, House lawmakers burned the midnight oil en route to passing the bill later that evening.

The tax cuts affecting Americans at every income level were scheduled to expire December 31st, but the legislation approved this week extends them for two years. The measure also renews a program of jobless benefits for the long-term unemployed and enacts a one-year cut in Social Security taxes.

A worker making $50,000 in wages would save $1,000 in Social Security taxes. A worker making $100,000 would save $2,000. The bill's cost, $858 billion, would be added to the deficit.

At the insistence of Republicans, the plan includes provisions allowing the first $10 million of a couple's estate to pass to heirs tax-free. The balance would be subject to a 35 percent tax rate. Many House Democrats wanted a higher estate tax imposed, perhaps as high as 55 percent. But the President this week continued to push Congressional members to seek a compromise in an effort to pass the bill.

President Barack Obama: "I know there are different aspects of this plan to which members of Congress, on both sides of the aisle, object. That's the nature of compromise. But we worked hard to negotiate an agreement that's a win for middle-class families and a win for our economy. And we can't afford to let it fall victim to either delay or defeat. So I urge members of Congress to pass these tax cuts as swiftly as possible."

Many farm leaders praised the bill, eyeing estate tax provisions that eliminate what has come to be referred to in some circles as the "death tax."

According to DTN, farmland values throughout the Midwest have nearly tripled since 2000, jumping another 10 to 16 percent in the past 12 months alone. Earlier this week, the American Farm Bureau Federation called the passage of estate tax relief "the single most important tax issue left unresolved by Congress."

Additionally, a one-year extension of a key government incentive for ethanol known as the "blender's credit," as well as breaks for producers of other renewable fuels also were approved in the legislation.

Tags: agriculture Barack Obama Congress George W. Bush government news