Key features of proposed tax-cutting deal

WASHINGTON (AP) — Highlights of the proposed bipartisan tax cutting agreement announced today by President Barack Obama.

• Extends all tax rates approved under President Bush for two more years for all taxpayers. Republicans wanted a permanent extension. Obama wanted to extend the current tax rates only to households earning less than $250,000.

• Applies a 35 percent tax for two years on estates worth more than $5 million. The Obama administration had proposed a 45 percent rate with a $3.5 million threshold.

• Extends unemployment insurance for 13 months, providing benefits to two million long-term unemployed workers in December and seven million over the next year.

• Cuts payroll taxes by 2 percentage points for 2011 for a total of $120 billion. That means employees will pay 4.2 percent to Social Security instead of 6.2 percent. A worker who earns $40,000 a year would get $800 over the year; a worker who makes $70,000 would get $1,400.

• Extends increases in the Earned Income Tax Credit, the child credit and tuition credits adopted in the 2009 economic stimulus package that were set to expire.

• Allows businesses to write off 100 percent of their capital investments for tax purposes during 2011. The current write-off is 50 percent.