Will the Bush Tax Cut Deal Include a Payroll Tax Holiday?

Whew, is there anything not being discussed at the Bush tax cut negotiations? At this rate, tomorrow afternoon the Bush tax cut package will include: Don't Ask Don't Tell, a trade agreement with Taiwan, the sale of Alaska to the Russians, the public option, and the annexation of Belize.

Negotiators are discussing whether to suspend collecting payroll taxes from workers' paychecks as part of a broader compromise to extend soon-to-expire Bush-era tax cuts temporarily, an administration official said.

The so-called "payroll tax holiday," was proposed as an alternative to renewing the "Making Work Pay" tax credit, a creation of President Barack Obama that expires Dec. 31 along with lower income-tax rates enacted in 2001 and 2003, the official said, speaking on condition of anonymity.

Negotiators also are discussing including Obama's proposal to allow a full deduction for equipment purchases that currently must be deducted over time. The White House estimates 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.

Read the full story at Bloomberg.