Congress Passes Compromise Measure, Fiscal Cliff Avoided
We might get a break from hearing about the “Fiscal Cliff” for a while at least. The GOP-dominated House of Representatives has approved a bipartisan Senate deal by a 257-167 vote, preserving the Bush-era tax cuts for all Americans making less than $400,000 per year.
President Obama, who will sign the bill into law, said after the vote that he was pleased with the outcome, thanking “extraordinary” Vice President Joe Biden, who helped push the deal through, as well as House and Senate leaders.
If Congress had failed to reach this compromise, the president said the country would have plummeted back into a recession with all Americans who pay federal income taxes seeing their rates go up.
The meat and potatoes of the deal is as follows:
- extends Bush-era tax cuts permanently for those making under $400,000 and couples making under $450,000
- raises tax rate to 39.6% those making over $400,000 or couples making over $450,000
- capital gain taxes bump from 15% to 20%
- estate tax rises from 35% to 40% for estates larger than $5 million
- prevents alternative minimum tax from hammering millions of middle-class workers
- extends unemployment benefits for one more year
Oh, and Congress agreed to postpone their scheduled $900 a year pay raise that was due to take effect in the spring.