AP: White House And GOP Reach Deal On Fiscal Cliff
Last edited Mon Dec 31, 2012, 11:18 PM - Edit history (2)
Source: TPM
Citing a Senate Democratic aide, the Associated Press is reporting that the White House and GOP have reached a deal on the fiscal cliff. No more details yet.
(more details)
http://www.nytimes.com/2013/01/01/us/politics/2-sides-in-talks-inch-closer-but-no-fiscal-deal-on-final-day.html?pagewanted=all
Under the deal, income taxes would rise to 39.6 percent from 35 percent on income over $400,000 for single people and $450,000 for couples. Above those income levels, dividends and capital gains tax rates would also rise, to 20 percent from 15 percent.
An official familiar with the negotiations stressed that taxes would rise in some sense on the top 2 percent of earners, as Mr. Obama has wanted since his first presidential campaign in 2008. That is because the deal would reinstate provisions to tax law, ended by the Bush tax cuts of 2001, that phase out personal exemptions and deductions for the affluent. Those phaseouts, under the agreement, would begin at $250,000 for single people and $300,000 for couples.
The estate tax would also rise, but considerably less than Democrats had wanted. The value of estates over $5 million would be taxed at 40 percent, up from the current 35 percent. Democrats had wanted a 45 percent rate on inheritances larger than $3.5 million.
Under the deal, the new rates on income, investment and inheritances would be permanent, as would a provision to stop the alternative minimum tax from hitting middle-class families.
Read more: http://livewire.talkingpointsmemo.com/entry/ap-white-house-gop-reach-deal-on-fiscal
http://politicalticker.blogs.cnn.com/2012/12/31/details-emerge-in-fiscal-cliff-agreement/
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The same source said the plan postpones the sequester by two months, half paid for through tax revenue and half paid for through spending cuts. Half of the spending cuts stems from defense spending and half from non-defense spending.
The individual $5 million exemption level for the estate tax, an element supported by Republicans, will remain. But that cap is indexed to inflation, meaning it will increase every year, according to the same source, an element incorporated at the insistance of moderate Democrats.
Additionally, the “Doc Fix,” payments to doctors who take Medicare patients that the GOP wanted, will continue but will not be paid for by the Affordable Care Act.
The tentative agreement also includes a one year extension of unemployment benefits and will allow income taxes for individuals making more than $400,000 a year and households making $450,000 to return to the Clinton-era rate of 39.6%.
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