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Sunday, December 19, 2010

Details of the Obama tax cuts for Michiganders, states' unemployed, 99ers

Photo Credit-McClatchy Tribune/Olivier
Douliery President Obama in a signing
ceremony enacts HR-4853 into law
 on Friday, December 17th
On Friday, December 17th, in a signing ceremony, President Barack Obama signed HR-4853 'The Middle Class Tax Relief, Unemployment Extension Act of 2010

The measure adds $857 Million dollars to the nations' $13.8 Trillion dollar debextension filing dates for unemployment insurance for an estimated 180,000 Michiganders, allow for a 2 percent deduction in the Social Security payroll tax was enacted and promise tax cuts at all income levels for Americans.

Examining the facts of the law, details vary of what the legislation as in store for Michiganders. 

Individuals and families expecting an immediate deduction in tax rates, will be surprised to learn that the rates will stay the exact same as in 2010. The law does not increase or directly decrease taxable income rate paid on earnings

President Obama signed an extension of the former Bush Era Tax Cuts of 2001 and 2003. Certain tax savings similar to the child care, earned income, and college tax credits will continue at the same rates in previous years. 

Other credits, including the popular Making Work Pay for the lower and middle wage earners, will be eliminated on 2011 tax returns. The credit was worth $400 a year to individuals earning up to $75,000 and $800 a year to couples earning up to $150,000.

The 2 percent Social Security withholding deduction, means less money into the stained funding of the programs' retirement accounts, for at least the next two years. Withholdings into the Social Security account would also stop, after individuals earned $106,800 in a year. 

Savings received by the withholding credit is worth $200 for every $10,000 earned in 2011. Workers averaging $50,000 a year, would receive a $1,000 in savings more over the course of next year and if earning are equal or over $100,000, the savings would be $2,000.

The payroll deduction in weekly or bi-weekly paychecks is not truly a credit but, what is described as 'shifting of future earnings'. Monies paid to the future precipitants of Social Security, instead would be 'given' to wage earners now; hereby robbing those retirees of interest earned properly funding for the retiree income program.

Signing HR-4853 into law on Friday, President Obama enacted 13 months for jobless Michiganders under 99 weeks to file claims for supplemental compensation until January 2011. The new law does not extend any additional weeks of  benefit payments into program.

Michigan unemployment rate fell 0.4 percentage points November 2010, to 12.4 percent, reported by the states' Department of Energy, Labor and Economic Growth on December 15th. 

If Michigan's unemployment rate-which is measured by the number of individuals filing weekly for jobless compensation- falls below 8.5 percent for three months in 2011, the number of weeks available for claims would decrease to 73 from the current maximum 99 weeks. 

In 2010, Michigan unemployment rate was 14.3 percent in January 2010, dropping 1.9 percent over the past 12 months. As more jobless continue to fall from being eligible to file for claims, job seeking Michiganders should prepare for the states' unemployment rate to decrease over the next year.

Current claimants can contact the Michigan's Unemployment Insurance Agency (UIA) website for information on when retroactive jobless payments will begin, for recipients whom stop receiving the supplemental compensation on November 30, 2010.  

Unemployed Michiganders over 99 weeks were not offered any level of continuing benefits within HR-4853 A proposal in the Senate -HR-3706 'The America Want To Work Act' known as the 'Tier V Bill' sponsored by Senator Debbie Stabenow (D-MI), was not included, in the tax cut law. 

Republicans take over the U.S. House of Representatives in January 2011. In addition, forty-seven Republicans will be seated in the Senate in 2011 with 51 Democrats and 2 Independents. If the Democratically controlled Senate were to pass S-3706, the measure would face a difficult chance of obtaining the votes necessary in the House without funding -taken from elsewhere in the Federal fiscal budget- for the legislation. 

Michigan's UIA website directs state residents exhausted from jobless compensation, contact the states' Department of Human Services department to determine eligibility for low-income food, cash and other assistance programs.

Here's how Michigan's House delegation voted on final passage of the tax compromise, according to the Detroit Free Press.

Yes (10): Dave Camp (Midland Republican), John Dingell (Dearborn Democrat), Vernon Ehlers (Grand Rapids Republican), Dale Kildee (Flint Democrat), Sander Levin (Royal Oak Democrat), Candice Miller (Harrison Township Republican), Gary Peters (Bloomfield Township Democrat), Mike Rogers (Howell Republican), Mark Schauer (Battle Creek Democrat), Fred Upton (St. Joseph Republican).

No (5): John Conyers (Detroit Democrat), Pete Hoekstra (Holland Republican), Carolyn Cheeks Kilpatrick (Detroit Democrat), Thaddeus McCotter (Livonia Republican), Bart Stupak (Menominee Democrat).

What are your thoughts on this article? Did the facts of the Obama Tax Cuts live up to your expectation of the measure? Why or why not? Feel free to comment on this story, below!
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