Econintersect: President Obama made a public settlement this afternoon (31 December 2012) to announce the compromise settlement that wasn’t yet complete for the fiscal cliff impasse. So the great anticipation that led up to the statement ended with a big letdown. Following That letdown a statement from Senate Republican leader Mitch McConnell buoyed hopes again as he announced that the final deal was very close – that the tax deal was agreed and only dealing with the sequester remained.
Here are the compromise details rumored as this is written:
- Preserve the current tax rates for incomes up to $400,000 for individuals ($450,000 married couples).
- Reduction of deductions for high income individuals.
- Raising the starting tax rate on estates from 35% to 45% while maintaining the $5 million exclusion (which is $10 million for couples with proper estate planning).
- Maintaining federal unemployment compensation.
- Maintaining earned income tax credits for low income families.
- Increasing top capital gains and dividend tax rates from 15% to 20%.
Just how the sequester spending cuts will be addressed is still open. Rumors have the debate centered on a three month delay of sequestered cuts (Republicans) and a two year delay (Democrats). In other words it seems to be a debate between how far to “kick the can.”
GEI will update this story further when more details are available.
Sources:
- Obama makes fiscal cliff statement (Jed Lewison, Daily Kos, 31 December 2012) Video of speech.
- McConnell: “I can report we’ve reached an agreement on all the tax issues. We are very, very close.” (Breaking News, 31 December 2012) A collection of tweets.
