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Here's What's in the Fiscal-Cliff Deal
Source:
nationaljournal.com
- Jan 2, 2013
Congress on New Year's Day approved legislation to address the year-end tax hikes and spending cuts known as the fiscal cliff. The measure passed the House late on Tuesday after the Senate approved it earlier in the day. Here’s what’s in it:
Higher taxes on individuals earning $400,000 and on families making $450,000 or more. Under that threshold, the Bush-era tax cuts will be permanent for all but the wealthiest households. The $450,000 threshold for families is a significant increase from Democrats’ initial proposal to raise taxes on Americans making $250,000 or more, but it is lower than Republicans’ earlier proposal to raise taxes on households making $1 million or more.
Higher tax rates on capital gains and dividends for wealthier households. Taxes on capital gains and dividends will be held at their current levels of 15 percent for individuals making less than $400,000 and households with income of less than $450,000. They will rise to 20 percent for individual taxpayers and for households above those thresholds.
Automatic spending cuts delayed for two months. The "sequester," which would impose steep, across-the-board cuts to domestic and defense programs, will be delayed for two months.
One-year extension to unemployment insurance. Emergency unemployment benefits will be extended for a year. The extension was a priority for President Obama and congressional Democrats.
One-year "doc fix." The measure will put off scheduled cuts in physician payments under Medicare. In the absence of an agreement, the payments were going to be reduced by 27 percent in January.
Nine-month farm bill extension. Breakfast lovers, rejoice: A much-feared spike in milk prices, dubbed the “dairy cliff” because it was also set to kick in abruptly on Jan. 1, will be averted through a nine-month extension of certain portions of the farm bill.
Personal exemptions phased out for individuals making over $250,000. Personal exemptions will be phased out and itemized deductions will be limited for taxpayers making over $250,000 and families earning more than $300,000.
40 percent estate tax. The estate tax will rise to 40 percent from its current 35 percent level, with the first $5 million in assets exempted. Democrats had earlier sought a higher increase to 45 percent and a lower exemption of $3.5 million.
READ MORE:
http://nationaljournal.com/congress-legacy/here-s-what-s-in-the-fiscal-cliff-deal-20130101
Category: General Business
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