PLEDGE NOW
Here and Now with Robin Young and Jeremy Hobson
Public radio's live
midday news program
With sponsorship from
Mathworks - Accelerating the pace of engineering and science
Accelerating the pace
of engineering and science
Tuesday, January 1, 2013

Fiscal Cliff: What’s In The Senate Deal?

Here’s some highlights from the Senate deal on the fiscal cliff passed early Tuesday morning:

-Income tax rates: Extends decade-old tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6 percent, up from the current 35 percent. Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000.

-Estate tax: Estates would be taxed at a top rate of 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35 percent.

-Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families would increase from 15 percent to 20 percent.

-Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000. The tax was originally designed to ensure that the wealthy did not avoid owing taxes by using loopholes.

-Other tax changes: Extends for five years Obama-sought expansions of the child tax credit, the earned income tax credit, and an up-to-$2,500 tax credit for college tuition. Also extends for one year accelerated “bonus” depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity.

-Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.

-Cuts in Medicare reimbursements to doctors: Blocks a 27 percent cut in Medicare payments to doctors for one year. The cut is the product of an obsolete 1997 budget formula.

-Social Security payroll tax cut: Allows a 2-percentage-point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2 percent.

-Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rule changes on converting traditional individual retirement accounts into Roth IRAs.

Guest:

  • Bryan Bender, Boston Globe Washington national reporter. He tweets @GlobeBender.

Please follow our community rules when engaging in comment discussion on this site.
Spotlight

Robin Young and Jeremy Hobson are hitting the road. Our Tumblr brings you behind the scenes of our election coverage.

Robin and Jeremy

Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

February 11 13 Comments

Gravitational Waves Discovery Confirms Einstein’s Theory

Scientists detected the gravitational waves after a pair of unusual black holes collided.

February 11 6 Comments

Pope To Visit Juárez During Mexico Trip

The border city is recreating itself after years of bloodshed – something Pope Francis lived through in Argentina.

February 11 25 Comments

A Senator Makes The Case For Authorizing Use Of Force Against ISIS

It's been a year since the president asked Congress to authorize the offensive already underway. Sen. Jeff Flake is pushing for a vote.

February 10 Comment

A Look At Prisons Around The World, With A Spotlight On Our Own

Baz Dreisinger visited prisons in nine countries and wrote about her experiences in a new book, "Incarceration Nations."