Cliff deal would extend tax cuts for households up to $450,000

alexskopje/Shutterstock.com

Talks between Senate Republican Leader Mitch McConnell and Vice President Joe Biden have resulted in key tax provisions as the two worked to finish a compromise that would avert the fiscal cliff of tax hikes and drastic spending cuts poised to hit economy starting Jan. 1:

  • Income tax rates would go up to Clinton-era rates on individuals making more than $400,000 and families making more than $450,000. The Bush-era tax cuts would be made permanent for everyone under that threshold. Those below the threshold would see a permanent 15 percent capital gains and dividends rate, and those above the rate would pay 20 percent. 
  • The estate tax would be exempted on the first $5 million, and assets over that amount would be taxed at 40 percent. Current law exempts the first $5 million and taxes the rest at 35 percent, but that expires today and reverts to 55 percent tax rates on assets more than $1 million on Jan. 1.
  • A permanent "patch" for the Alternative Minimum Tax, which was meant to make sure millionaires paid their fair share of taxes, but which has increasingly ensnared the middle class.
  • A five-year extension on the American Opportunity Tax Credit, Child Tax Credit, and Earned Income Tax Credit.

Democrats and Republicans are still working on how to prevent across-the-board spending cuts that begin next year.

(Image via alexskopje/Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

    Download
  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

    Download
  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

    Download
  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

    Download
  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security

    Download

When you download a report, your information may be shared with the underwriters of that document.