The House passed the Senate bill late tonight 257-167 with Democratic and Republican support to advert the Fiscal Cliff. It was a fight to the end as Republicans pushed for spending cuts, but worried a “no deal” would drive our economy into another recession.
So how does this affect you?
Here are the details of the bill:
- Tax rates: Current tax rates will be extended for all wage earners making below $400,000 for individuals and couples making below $450,000. This was a victory for the Republicans who raised the income level from Obama’s suggestion of $250,000 for couples.
- Estate Tax: The new rate is 40% with the first $5 million worth of property exempt from being taxed. The previous rate was at 35% and at 40% was less than the 55% that the Democrats supported.
- Capital Gains Tax: Capital gains and dividend tax rates will increase from 15-20%.
- Alternative Minimum Tax: This is a permanent fix to the tax that would hit middle class families.
- Doctors will be shielded from a massive reimbursement gap for treating Medicare patients.
- Unemployment Benefits: Some $2 million unemployed workers will continue to receive unemployment benefits as long as they are look for a job. Benefits had expired on December 29th.
- Renewable Energy Tax Credit: The tax credit for renewable energy companies will be extended for another rear.
- The “Milk Cliff” was avoided as subsidies for milk are extended; averting looming price hikes that were poised to bring the price of milk to $9 a gallon.
- Congressional Pay Freeze: The scheduled increase in salary for members of Congress was halted.
Many are dissatisfied by the new bill that adds revenue, but does little to bring down theU.S.debt that is at record levels. President Obama says that they will take this step to step to bring down government spending.
One thing they can all agree on is that this is just in the beginning of a contentious and highly charged fight over the next couple of months.