Monday, December 31, 2012

"Fiscal Cliff" Deal

by Bill McBride on 12/31/2012 12:54:00 PM

From Ezra Klein:
1. Details on the deal: 39.6% tax rate for individual income over 400k/family income over $450k. AMT patched permanently.

2. Dividends and cap gains taxes at 20% of the $400k/$450k levels. PEP at $250k. Pease at $300k.

3. UI and business cuts extended through 2013. Stimulus cuts for 5 years. Medicare cuts stopped with offsets. Payroll cut expires.

4. Sequester unclear. Prez wants to offset with taxes and spending cuts. R's only want to offset with spending cuts.

5. Estate tax set at $10m exemption but 40% rate.

6. Deal raises about $600b -- and maybe a bit more -- in taxes over 10 years. As always details can change, but that's where it is now.

From Reuters:

• Obama to speak on fiscal cliff at 1:30pm ET event: White House
• Source: Emerging "cliff" deal would raise tax on income above $400k/yr
• Source: Emerging deal would include permanent alternative minimum tax fix
• Source: Emerging deal would extend unemployment benefits for a year
• Sr. Republican aide: Tentative "cliff" deal contains no new spending cuts
• Sr. Republican aide: Majority of Sen. GOP expected to support tentative deal
• Cornyn via Twitter: GOP to meet at 2pm ET on fiscal cliff negotiations