US President Barack Obama has announced a bipartisan agreement has been reached to extend soon-to-expire Bush era tax cuts to all Americans.
Referring to the bitter wrangling over the issue, Mr Obama said he would not "let working families become collateral damage for political warfare".
Some Democrats have said the deal, which must be voted on by Congress, is too generous to the wealthy.
Unemployment benefits will also be renewed under the agreement.
The BBC's Steve Kingstone, in Washington, says the deal represents a climb-down by President Obama.
It marks a reversal of his position, first laid out in his 2008 campaign, that tax cuts should only be extended at incomes up to $200,000 for individuals and $250,000 for couples.
Following November's mid-term elections, Republicans took control of the House of Representatives and increased their power in the Senate.
Mr Obama's announcement came two days after the US Senate rejected President Obama's preferred tax plan. BBC News
