Final Vote on Hot-Button Tax Deal Could Happen
COLUMBIA - President Obama's highly talked-about tax deal made it over a major hurdle Monday with a vote to end the debate in the Senate 83-15. Tuesday night, final Senate approval may happen. How does this tax deal relate to you in mid-Missouri?
Economy professor Diane Suhler of Columbia College says the major part of the deal that will affect mid-Missourians is the two percentage point cut to payroll tax.
Obama is calling this package a "victory for middle class families."
This means that the 6.2 percent of your salary that goes to Social Security will now be reduced to 4.2 percent if the deal passes.
The median income of a mid-Missouri family is around $50,000. This means the family will be able to keep around an extra $1,000 more this year if the deal passes. The national average income of an American family is around $45,000.
Suhler says this extra cash will encourage people to put a little bit more money back in to our system and bolster the economy. She says this may help business owners looking to expand and invest.
The tax proposal will also extend unemployment benefits for 13 more months this year. The unemployment rate in Missouri is 9.4 percent.
The plan will also extend the Bush-era tax credits that are set to expire December 31. We might not see much change with our salaries because of this.
The President is calling this package "strong with bipartisan support." But the President did say, "I recognize that folks on both sides of the political spectrum are unhappy with parts." The tax deal is being called a compromise.
The President hopes this will help to better recover from the recession and create new jobs.