Personal Finance

Senate Extends Tax Cuts and Unemployment Benefits

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The U.S. Senate reached a compromise about whether to extend unemployment benefits for millions and tax cuts for the upper and middle class, passing a bill that will allow both to happen.

Though members of both parties had expressed deep concerns over the financial impact of this legislation, the bill passed 81-19. It now rests in the House, where it could be passed as early as December 18, if Democrats can attach some amendments prior to the vote.

“This vote brings us one step closer to ensuring that middle-class families across the country won’t have to worry about a massive tax hike,” President Barack Obama said in a statement.

The Senate’s version of the bill is said to cost the government $858 billion over the next 10 years by extending income tax cuts for two years before implementing a one-year drop in payroll taxes. In addition, it extended unemployment benefits for another 13 months. The bill also alters estate tax law, allowing couples to pass on millions of dollars to their heirs tax-free.

One earlier version of the bill only extended the tax cuts to families and individuals that made $250,000 a year or more, while another draft would have made them permanent.

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