The Obama administration proposed a year-long reduction in payroll taxes of 2 percentage points as part of a broader compromise to extend Bush-era tax cuts temporarily, a congressional aide said.<\/p>\n
The proposed reduction was offered as an alternative to renewing the \u201cMaking Work Pay\u201d\u009d tax credit, a creation of President Barack Obama that expires Dec. 31 along with lower income-tax rates enacted in 2001 and 2003, the aide said, speaking on condition of anonymity. Some Senate Republicans oppose the credit.<\/p>\n
Negotiators also are discussing including Obama\u2019s proposal to allow a full deduction for equipment purchases that currently must be deducted over time, an administration official said. The proposal would accelerate $200 billion in tax savings for companies in the first year and benefit 1.5 million companies and several million individuals who run businesses, according to White House estimates.<\/p>\n