Congressman Patrick McHenry (NC-10) voted for H.R. 4853 tonight, which prevents tax rate increases from taking effect on January 1, 2011.  The bill passed by a vote of 277 to 148.
 
“We need to make these tax cuts permanent, bottom line.  A last-minute, two year extension does not alleviate the massive uncertainty faced by small businesses,” said McHenry.  “However, the short term consequences of failing to act now would be devastating - our economy is too fragile.  We can’t afford to gamble on a Democratic Senate and President supporting a better deal in January.  It would squander our ability in the Majority to fight for the long term solution that we need.”

The centerpiece of the tax agreement is the two-year extension of the 2001/2003 tax rates, set to expire at the end of the month.  The other key provisions are as follows:

• Tax Breaks for Businesses – Allows businesses to write off 100% of equipment purchases made between Sept. 8, 2010 and Jan. 1, 2012.  Extends a range of expired business-tax breaks including the research-and-development credit.

• Alternative Minimum Tax (AMT) patch – Shields most taxpayers from the alternative minimum tax in 2010 and 2011.

• Reduction in the Estate Tax – Reduced to a 35% on estates worth more than $5 million for individuals and $10 million on couples.  Under current law, this tax would be reinstated in 2011 at a rate of 55% on estates worth more than $1 million.

• Reduction in the Payroll Tax – Federal payroll taxes reduced for one year by two percentage points to 4.2% from 6.2%.

• Extension of Unemployment Insurance – Jobless benefits extended for 13 months.  This extension will not affect people who have already exhausted the maximum combined state and federal assistance of 99 weeks.  It would make sure that the long-term unemployed in states hardest hit by the economic downturn would be able to receive as many as 99 weeks, rather than the 26 weeks normally available.