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Senate Passes American Taxpayer Relief Act 89-8; Moves to House for Final Passage

by Tanya Domi on January 1, 2013

in Economics,News,Tanya Domi

The U.S. Senate worked into the early hours in the New Year and overwhelmingly passed  a measure in a deal crafted between the White House and Senate Republicans

Just two hours into the New Year, the Senate overwhelmingly passed The American Taxpayer Relief Act, moving it to the House of Representatives for final passage, in a tortuous effort fashioned in a deal between Vice-President Joseph Biden and Senate Minority Leader Mitch McConnell (R-KY).

The bill immediately moved to the House, where a vote is not anticipated to occur today.  The Republican caucus just returned to Washington for business yesterday.  Biden visited Capitol Hill today for a meeting with the Democratic House caucus, which is expected to overwhelmingly support the measure.

According to a Medialite report the measure passed by the Senate is highlighted by an unanticipated agreement to not raise Congressional salaries.  Other highlights include:

The agreed-upon measure will extend Bush-era tax cuts for family incomes below $450,000 and individual incomes below $400,000.

Clinton-era tax rates of 39.6 percent will be instituted for income above these thresholds. It is expected to raise $600 billion over 10 years.

The deal also includes a two-month delay on sequestration, with a 50-50 mix of spending cuts and revenue to pay for the $24 billion it will cost.

Approximately half of the cuts will come from defense spending.

The estate tax rate will be 40 percent with the exemption limit being set at the first $5 million of income, indexed for inflation.

Tax rates on capital gains and dividends will be set permanently at 20 percent.

The deal will also include a one-year “doc fix,” which will prevent cuts in provider payments through Medicare, but will not be financed by the Affordable Care Act.

A one-year extension of the federal unemployment insurance program was also part of the package.

The 2 percent payroll tax cut will expire.

The “Dairy Cliff” will be avoided as well, with an included 9-month partial extension of the U.S. Farm Bill to keep dairy prices from doubling.

The American Taxpayer Act 2012 in its entirety:

Mat 12564

 

316568_10150308241032334_651712333_8318983_213496096_nTanya L. Domi is the Deputy Editor of the New Civil Rights Movement blog.  She is also an Adjunct Assistant Professor of International and Public Affairs at Columbia University and teaches human rights in East Central Europe and former Yugoslavia.  Prior to teaching at Columbia, Domi was a nationally recognized LGBT civil rights activist who worked for the National Gay and Lesbian Task Force during the campaign to lift the military ban in the early 1990s. Domi has also worked internationally in a dozen countries on issues related to democratic transitional development, including political and media development, human rights and gender issues.  She is chair of the board of directors for GetEQUAL.  Domi is currently writing a book about the emerging LGBT human rights movement in the Western Balkans.

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{ 1 comment }

thomsense January 1, 2013 at 3:13 pm

While I am happy to see that Congress addressed capital gains taxes, I am disappointed at how they did it. Capital gains either needs to have brackets like the income tax, or they need to be abolished entirely such that they are taxed like any other income.

I'm also EXTREMELY unhappy that this compromise is structured to create a "super-cliff" in two months. ANOTHER self-inflicted wound? Seriously??

That said, I don't think anybody is going to be all that happy about this compromise, for one reason or another…which probably means it was the right one to make.

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