Tax Foundation’s Online Tax Calculator Updated to Include Compromise Proposal

December 8, 2010

On Monday, President Obama and Senate Republicans reached a tentative compromise on tax cuts for the next couple of years. Under the plan, all of the Bush tax cuts would be extended, in addition to all of the 2009 stimulus bill tax cuts except for the Making Work Pay credit, which will be replaced by a cut in the employee portion of the social security payroll tax rate from 6.2% to 4.2%.

We have updated the calculator at to include this compromise scenario. Users can now compare their 2011 tax bill under three scenarios: (1) Congress lets all the Bush tax cuts expire; (2) Congress passes the compromise proposal, and (3) Congress passes the Democratic tax plan that recently passed the House but has stalled in the Senate. The calculator now includes a calculation of payroll taxes in addition to income taxes, since the payroll tax cut is an important component of the compromise plan.

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