As the buzz surrounding President Obama’s announcement yesterday of a deal on the Bush tax cuts continues to churn, some numbers have started to fly about (see a version of the White House Fact Sheet here):

• Social Security. The deal reduces the employee portion of Social Security from the current 6.29% down to 4.29%, which is projected to cost $120,000,000,000 next year alone. On the upside, if you make $60,000 a year, you just got a $1,200 pay raise, or about an extra $100 a month.
• Unemployment benefits. The deal extends them until early 2012, adding $56,000,000,000 to the deficit.
• Business credits. Businesses benefit, too, under the deal. Here’s how:
  • Full write-off of investments. Companies would be allowed to write off the full value of investments in 2011. What constitutes an ‘investment’ wasn’t defined, though much of the talk this morning was around the fact that companies would not have to depreciate assets. So the logical assumption is a credit similar to Section 179, if not an increase in Section 179 itself. The White House estimates that this will generate $50,000,000,000 of business-related spending in 2011. Caveat: in the past when the government has allowed for ‘bonus depreciation’ in a given year, many states have ‘decoupled’ and kept the old rates and schedules. This creates headaches for accountants, who have to keep two sets of numbers for assets. It also leads them to discourage investments by focusing on the negatives.
  • A two year extension of the R&D credit.
• Other cuts and benefits. These are estimated to cost around $40,000,000,000 as such benefits as the American Opportunity tax credit get extended (that credit replaced the Hope Credit), an expansion of the Earned Income  Tax Credit and an extension of the $1,000 child tax credit.

Some things are more notable for NOT being in the bill. For example, the Making Work Pay Credit had to be abandoned. Ironically, Senator Hatch (R-UT) complained that that credit allowed too many middle class taxpayers to avoid having to pay taxes. Is Senator Hatch actually suggesting that the middle class – already the most squeezed class in the current recession, and often thought of as disappearing – doesn’t pay enough taxes and should pay more? Interesting.

While an estate tax provision IS in the deal, what the White House hasn’t said is how much revenue it could bring in – though Nancy Pelosi, in her statement opposing Republican parts of the deal, pegged the number at $25,000,000,000. Unfortunately, that won’t even cover one of the above provisions.

There are some other