The Great Tax Cut Cave-In of 2010

Reporting on Politics and Policy.
Dec. 6 2010 7:29 PM

The Great Tax Cut Cave-In of 2010

Marc Ambinder has the details.

Sources close to the negotiations said Republican negotiators agreed in principle to a host of items -- a payroll-tax cut in 2011, extending unemployment insurance 13 months, a two-year patch for the alternative minimum tax, and an expanded schedule for business expensing -- in exchange for a two-year extension of all reduced income tax rates and lower rates on capital gains and dividends.

The estate tax temporarily be reinstated at 35 percent, with a $5 million exemption, sources said. That result on its face would be a stunning victory for Senate Republicans and in particular Senate Minority Whip Jon Kyl , R-Ariz., who has been urging those levels.

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The problem, as Tim Fernholz and other reporters have been reporting, is that liberal Democrats are rushing out the door to condemn the deal. They did the same thing on the Senate version of health care, and they passed that.

David Weigel is a Slate political reporter.