President Obama and Republican leaders have reached a compromise “framework” for a two-year extension of the 2001 and 2003 tax cuts for all income levels, set to expire on December 31. The lawmakers also agreed to a 13-month extension of federal unemployment benefits and a one-year reduction in the worker’s Social Security payroll tax (FICA) from 6.2% to 4.2%.
The compromise includes a SEMA-supported extension of the research and development tax credit through 2011, retroactive to its 2009 expiration. Additionally, the estate tax would be reinstated at 35% after the first $5 million (for two years), and businesses would be provided a 100% write-off on capital expenses for businesses during 2011 (up from 50%).
SEMA has sent a letter of support to House and Senate members urging Congress to act quickly to enact the tax relief program. SEMA believes that the tax program will have a positive and noticeable impact on the economy and will provide many of the necessary tools for small businesses to remain the most important force in driving America’s economic recovery. For more information on these new developments, please contact Dan Sadowski, SEMA congressional affairs manager at firstname.lastname@example.org.