Tax cut

In December, Republicans and Democrats managed to extend a payroll tax cut, unemployment benefits and a fix for Medicare payments. That extension runs out at the end of the month but, at least when it comes to the payroll tax cut, Republicans are willing to offer another extension through the end of the year.

Republicans, seeking to explain their seeming inflexibility and unwillingness to compromise, are wrapping themselves in the flag of Ronald Reagan. They’re bristling, however, when confronted with examples of Reagan raising taxes and even compromising.

Democrats are hoping to use the millionaire’s tax to push through an extension in President Barack Obama’s payroll tax cuts. So far, though, Republicans are resisting the idea of the millionaires tax, though they may be willing to use other means to keep the tax cut in place.

Texas Gov. Rick Perry, a Republican presidential hopeful, has proposed a flat tax plan that would be voluntary, and reduce the tax rate on most Americans. Republicans call it a tax cut for the rich.

Working families can take advantage of nearly 300 billion dollars in tax credits and deductions for the 2009 tax year.