By Vicki Needham - 12/03/10 12:27 AM EST
The White House downplayed any deal as did lawmakers involved in the talks.
The Baucus legislation makes permanent the 2009 estate tax rate of 45 percent, with an exemption for estates under $3.5 million, an issue that Republicans and Democrats have worked on for months without reaching an agreement.
"This estate tax policy recognizes the unique estate planning challenges of family ranchers and farmers across the country," Baucus said in a statement tonight.
The Baucus legislation would make permanent the current 15 percent rate for capital gains for individuals making up to $200,000 and families making up to $250,000. The bill also continues to treat dividends as capital gains rather than ordinary income.
In addition, the bill would extend for one year the Making Work Pay tax credit, which was included in the 2009 economic stimulus and is also slated to expire at the end of the year, that boosted paychecks by about $400 this year for single filers and up to $800 for households.
The legislation also makes permanent the child tax credit, marriage penalty relief as well as the earned income tax credit.
For businesses, the bill reinstates for two years, through 2011, the research and development tax credit, an issue supported by Republicans.
The measure also provides additional tax cuts for families paying college tuition and state and local sales taxes and property taxes.
The bill permanently cut tax rates to 10, 15, 25, 28 and 33 percent for individuals making up to $200,000 and families making up to $250,000.
“When families and businesses know what to expect from our tax system, they can plan, they can spend and they can expand," Baucus said in a statement.
"Our legislation cuts taxes and provides certainty to families, individuals and investors, giving them confidence to help our economy grow."
Alex Bolton contributed to this story.