Highlights of the Senate Bill Averting Fiscal Cliff
The bill passed on Tuesday intended at forestalling larger tax increases as well as the cut in the budget over the New Year. The measure would lead to a lift the taxable amount up by $6000 billion over the past 10 years when compared with the existing tax policies that were prevailing and were set to expire on Monday Midnight. It would also be getting delayed for the tenure of about two months across the board slashing to the budget of the Pentagon and other domestic agencies. The house is set to vote this Tuesday or Wednesday on the proposed bill. The highlights as stated in the bill are illustrated below-
- Income tax rates- Extension of decade old tax cut on the incomes up by $400,000 for the individuals while $450.000 for married couples. All earning above this income shall be billed or taxed at a rate of 39.6% from the current rate which was 35%. There is an extension of the cap that was imposed on the itemized deductions and ruling out the personal exemptions for all the individuals who will be earning more than $250,000 whereas in case of couples earning greater than $300,000.
- Estate Tax- The estates and land would be taxed at an extreme rate of 40%; where the first 5 million shall be exempted for the individual estates whereas $10Mn in case of the family estates. These estates were subjected to a top rate of 35% up unless till now.
- Capital gains, dividends- the tax on the capital gains as well as the dividend income shall be for those exceeding $400,000 for the individuals and for families it shall be $450,000 increasing from 15% to 20%.
- Alternative minimum tax- Enduringly focus on the alternative lowest tax and indexes it to rise to put off nearly 30 million middle- and upper-middle revenue proceeds taxpayers from being battered with higher tax invoice averaging almost $3,000. The tax was initially designed to guarantee that the prosperous did not avoid owing taxes by using excuses.
- Other tax alterations – expansion for five years Obama-sought extensions of the child tax credit, the gross income tax credit, and an up-to-$2,500 tax credit for college instruction.
- Cuts in Medicare compensation to the doctors and medical practitioners- blocking a 27% cut in the payments to the doctors for one year entirely. This is a product passed in the 1997 budget.
- Social Security Payroll Tax- permits a 2% cut in the payroll tax, restoring the tax to 6.2%.
- Across-the-board cuts- Suspension for two months $109 billion values of across-the-board expenditure cuts set to start striking the Pentagon and household organization the current week!
Tagged US Fiscal Cliff