Update: Obama signs tax bill into law
President Barack Obama signed a tax bill into law Friday that allows tax cuts for all income levels to continue for another two years and extends unemployment benefits for the next 13 months.
"Candidly speaking, there are some elements in this legislation that I don't like. There are some elements that members of my party don't like. There are some elements that Republicans here today don't like," Obama said. "That's the nature of compromise."
The House of Representatives approved the Senate bill late Thursday. The legislation is estimated to cost $858 billion dollars over 10 years and will be paid for by borrowing. The final vote was 277 to 148.
A majority of Democrats and Republicans voted for the Senate bill despite complaints from each party’s political base. The bill was negotiated between President Obama and Senate Republicans.
- 10 percent bracket – $89.3 billion
- 25 and 28 percent bracket – $36.7 billion
- 33 and 35 percent tax bracket – $60.8 billion
- $1000 child tax credit
- Tax break for commuters who use mass transit
- Deduction for qualified tuition and education-related expenses
- Itemized deduction for state and local sales tax in lieu of state income tax
- $250 deduction for teachers' out-of-pocket expenses for school classroom expenses
- Increased standard deduction for married couples
- Current lower tax rates on dividends and capital gains (no tax for taxpayers below the 25 percent tax bracket, 15 percent for all others)
- Limitation on itemized deductions for high-income taxpayers