Fiscal Cliff Deal Passes the Senate

Here it is: the bill the senate passed, and now its on to the house.  I read most of it.

The "American Taxpayer Relief Act of 2012" is a compromise, but its pretty much what we thought it would be.

The highlights:


·      The level at which tax rates will go up is $450k for families $400k for individuals. Not the $250k/$200k limit initially discussed. Capital gains and dividends rates go up for these people too.
·      Estate tax stays at a $5 million applicable exclusion amount, but the rate above that goes from 35% to 40%. The exclusion amount will go up, as it is indexed for inflation. 
·      Personal exemptions and itemized deductions are phased out at $300k for a family, and $250k for an individual. 
·       Mortgage interest deductions, tuition deductions, stay in place. 
·       Unemployment will be extended for a year. 
·       There are extensions for medicare/aid, clean energy companies, agri-business, indian owned businesses.
·       Payroll tax cuts were not extended. 


The lowlights:

·      Doesn't address the "sequester," the big federal budget cuts that are mandated to kick in to balance the budget, just delays it 2 months. 
·      Doesn't address the debt ceiling, which we apparently hit again, yesterday. That will need to be address in the coming months, AGAIN. 

Summary:

Income taxes go up, but it won't affect many people. Payroll tax cuts will affect a lot of people. Most everything in this bill just kicks the can down the road, a year or two, a month or two, we will have this battle again. We still don't have the budget cuts needed to pay down the national debt. 

And the real kicker: the house swears in a new batch of representatives on Thursday. So, if they don't pass this by Thursday, we start from scratch. Again. Make it happen, Boehner. 

3 comments:

Vince Fury said...
This comment has been removed by the author.
JP said...

Quit spamming my blog vince fury. Nobody likes you.

JP said...

That goes for you too, Hugh and Nicole. What insightful comments.

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