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American Jobs and Closing Tax Loopholes Act

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US Capitol BuildingThe Senate Finance Committee and the House Ways and Means Committee have released the legislative text of the American Jobs and Closing Tax Loopholes Act that, among other things, introduces tax cuts, expands career training, and extends eligibility for unemployment benefits. As noted by Arthur Delaney at the Huffington Post, this bill will not bring relief those who have exhausted their 99 weeks of unemployment benefits.

What’s in this bill that will affect you (as opposed to businesses)?

  • It would extend the state and local sales tax deduction, which expired December 31st, 2009.
  • It would extend a tuition deduction, estimated to affect 4.4 million families.
  • It would extend the teacher’s out-of-pocket expenses deduction.
  • It would extend a standard deduction for real property taxes. The Housing Assistance Tax Act of 2008 allowed homeowners to claim $500 ($1,000 for joint filers) for real property taxes if they claimed the standard deduction.
  • It would extend the Extended Unemployment Compensation program, which was set to expire June 2nd, 2010, through the end of the year.
  • it would extend the COBRA subsidy (which pays 65% of COBRA health insurance continuation premiums) to the end of the year.

If you’re curious about the other provisions in the bill, the ones that don’t directly affect us (many of which pay for the tax break extensions), the Washington Post has a good summary.

(Photo: laurapadgett)

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18 Responses to “American Jobs and Closing Tax Loopholes Act”

  1. Joe says:

    Ninety-nine weeks of unemployment pay outs seems like….a lot.

  2. Andy says:

    Seems to be more focused on corporations, with little real tax relief for working individuals. Can’t see any stand out credit or deduction akin to the stimulus credits of the last 2 years.

    • Jim says:

      There’s a lot for businesses and infrastructure because that, presumably, will create jobs and increase productivity rather than just put money in people’s pockets (teach a man to fish and all).

      • Andy says:

        Makes sense, but a lot of the benefits to business’ are in the form of tax breaks – which only make sense if companies are making profits. Outside of the big corporations, small business are in a tough environment precisely because of low consumer demand due to high unemployment. Still this bill has got some good stuff and should get passed by Congress. Paying for it will be another matter, but then again what’s a few more billion to the trillion dollar national debt.

  3. eric says:

    Are the comments all italicized?

    Anyways I’m not sure how many people end up using these deductions.

  4. zapeta says:

    Thanks for the summary and links. 99 weeks of unemployment is a lot but if you lost your job right at the beginning of the recession and still can’t find one you’ve probably exhausted 99 weeks. After you exhaust the 99 weeks your options get pretty slim.

  5. screwedbythisbill says:

    How about getting a job?

    • Sunset says:

      screwedbythisbill: In some parts of the country getting a job is not as easy as in other parts. Besides who can really get by on unemployment, it never replaces the salary you lost.

      • Texas Wahoo says:

        Of course it will replace a lot of the salary someone might get working fast-food, etc. It removes a lot of the incentive for people to work at lower level jobs, which are often easier to obtain.

    • Taz says:

      screwedbythisbill- Try spending ur entire life working mills, pulling chain, serious hard labor jobs and nothing else, get hurt one day o job of no fault of ur own, being injured for life, have workmans comp screw you around for a year just to find some loop hole and drop you like a bad disease with no other choice but to go back on unemployment while looking ur butt off for a job even though you are NOT supposed to work and while ur in constant pain, ony being now qualified for a very small fraction of whatever jobs are out there, which arent much, and looking for anything and everything anyway and still absolutely noone hires you. You can’t MAKE someone hire you. Injured for life- File for SSI/SSD?? Sure, what do I do for the 5 years of denials and appeals and runaround every SSI/SSD applicant goes through?? My wife is in the middle of this 5 year battle now, with 4 herniated discs from an accident as a teen. Neither one of us are supposed to work. Both of us live in constant pain. Both of us are searching until we are blue in the face for work anyway. Work that we are not supposed to be doing and both of us are STILL unemployed.

      • SC says:

        Get a better education so you can be qualified for something other than low skill, hard labor jobs. Every young person in this country has an opportunity to get a decent education and skills. When they are not capitalized on, it is not other’s faults and problem to solve.

        • Keli Baker says:

          I have a college education that has done nothing for me since losing my job. The area I live in is hard hit especially during the summer months. Teenagers have more luck getting jobs for the summer to pay for concert tickets and the latest fads in clothing than I do getting a job to keep a roof over my head. If you would take the silver spoon out of your mouth and truly look at the people who are living this life you might change your simple minded solution.

  6. Joann says:

    My husband has been unemployed since Jan 2009. He is not lazy and has certainly looked for a job. He is in construction. There is nothing out there. When small businesses cannot get funding to expand or build there is no construction. Many of the commercial loans are coming due and the companies cannot pay them. It’s a mess. I don’t like adding to the national deficit but I can tell you that we would lose everything without these benefits. Unless you have walked in our shoes please don’t be so critical.

  7. Helen says:

    I have been out of a job since July 2009 and I am freaking out. I have never been without a job for longer than a month. I’m on the Internet looking for jobs on a daily basis, but without any luck. The extended benefits will help me a great deal, especially health insurance.

    On a separate subject, I’m taking courses to make me more marketable, and wondered if the costs were tax deductible. Does anyone know?

    Thanks

    • SC says:

      A portion is tax deductable based on your income. Just do a Google search for “education tax deductions” and you will find several.

  8. bo says:

    Do unemployment benefits encourage laziness? One of the dumbest questions ever asked. It assumes that someone would rather do nothing for 80% less income than work for a living and support their family. Any average EUC payment is about 25-35% of what an individual makes when working. Since a majority of families live paycheck to paycheck a reduction of income of any sort is bound to seriously impact the quality of their life. We are not talking about reductions that force families to not go on a vacations or buy the newest toy or even buy hamburger instead of steak. In some cases the decisions are whether to eat lunch today or pay the mortgage. No one should nor does (I believe) want to stay on a federal dole program that drives them deeper and deeper into debt, depression and despair. What we need is a two fold plan to empower people. Create sustainable, economic jobs (green and other) that are not going offshore and incent people to save (no income tax on interest bearing accounts) and penalize people for rapacious consumerism (consumer tax). We might also think about much bigger fines for corporate malfeasance that would then be applied directly to reducing the debt. Lastly stop corporate welfare…paying farmers our money to not produce crops. Let em grow what they can and sell it for what they market will pay or not at all. Or pay them to grow it and give it away to needy AMERICAN families.

  9. Chris G says:

    Unfortunately, many of these jobs recently lost are permanently lost – America must return to frugality (though for some it’s too late). Folks will need to learn something new – and perhaps have to travel great distances to find a job, unless they start their own business.

    Many trends are at work – the migration of creative people to a few certain cities in the US (SF, Seattle, NYC, Boston, DC) at the expense of other cities (Detroit), the globalization of the economy, incredible exploding budget deficits which will crimp many efforts of government (prob spend anyway creating other larger problems).

    As a note – this bill is not all business tax cuts – this bill also singles out specifically ‘service” s-corporations – usually accountants, consultants, advisors, lawyers – for tax increases. I am one of these FYI. Interestingly, if I sold pianos as an s corp I would not see this tax increase but as a service provider I will. This seems strangely arbitrary (do the bill sponsors have a beef with accountants or lawyers?) if this bill passes this is what I will consider over the next 3 years:

    1. change to c-corp (which may be more beneficial then with tax deductions available to c corps that are not avail to s corps)
    2. not hire another worker (just hired one a few months ago but now will have to pay taxes – so no more money to hire more)
    3. leave my higher tax state and locate my business in a state like Florida (no tax). If the federal govt takes from me then I will have to offset by eliminating the taxes from my state.
    4. Work less – why grow a business to support government spending? Why support Iraq? Why bail out GM? I’ll just relax – imagine thousands of small businesses, who could be growing and hiring, just “relaxing.”

    Congress hopes to raise $11B with this specific provision – less than 10% of what the President requested for increased military spending for Afghanistan.

    If they try to increase taxes specifically on me – someone trying to work hard to grow a small business – I may just not try as hard – perhaps collect 99 weeks of UE – why work? oh wait, I can’t collect since I’m self employed…

    In summary, many of you don’t understand what it takes to start a small business and grow it to the point where you can support yourself and then hire others – we create jobs by taking ourselves from the workforce then by hiring.

    Furthermore, some of you are very eager to ‘tax business’ to bail everyone out. You may soon find that golden goose dead – as Margaret Thatcher once said – “The problem with socialism is that eventually you run out of other people’s money.” This government may napalm this entire economy by trying to “save it.”


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