What’s In the Fiscal Cliff Bill?

Rest assured, no matter what party your are, you’re going to think its pretty pathetic. Usually if both parties hate some of a bill, thats a good sign its a moderate piece of legislation; democracy at work. In this case, no one seems to like any of this bill, which is surprising considering it passed 89-8.  CNN fills us in on whats actually addressed:

Under the Senate package:

— Taxes would stay the same for most Americans. But they will increase for individuals making more than $400,000 and couples making more than $450,000. For them, it will go from the current 35% to the Clinton-era rate of 39.6%.

— Itemized deductions would be capped for those making $250,000 and for married couples making $300,000.

— Taxes on inherited estates will go up to 40% from 35%.

— Unemployment insurance would be extended for a year for 2 million people.

— The alternative minimum tax — a perennial issue — would be permanently adjusted for inflation.

— Child care, tuition and research and development tax credits would be renewed.

— The “Doc Fix” — reimbursements for doctors who take Medicare patients — will continue, but it won’t be paid for out of the Obama administration’s signature health care law.

— A spike in milk prices will be avoided. Agriculture Secretary Tom Vilsack said milk prices would have doubled to $7 a gallon because a separate agriculture bill had expired.

What’s not addressed

While the package provides some short-term certainty, it leaves a range of big issues unaddressed.

It doesn’t mention the debt ceiling, and temporarily puts off for two months the so-called sequester — a series of automatic cuts in federal spending that would have taken effect Wednesday. It would have reduced the budgets of most agencies and programs by 8% to 10%.

No matter what happens in this bill, all working people will see their taxes go up in 2013, as the payroll tax cut will be expired, raising it back to 6.2% from 4.2%, up to $110,000 in earnings.

This is the real travesty of all this. Congress has been fighting about a 4% tax increase on the rich, whether its $250,000 a year or $450,000 a year. No one seems to care that all working people, even those who make $5,000 a year, will see a 2% increase no matter what.

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4 Responses to What’s In the Fiscal Cliff Bill?

  1. I never understood why the GOP continued to be so stuck up on not raising taxes on top 2%. It’s only a 4% bump. I know that it doesn’t even make a dent in our overall debt crisis, but the public has the perception (be it from some media and the Obama campaign) that this alone would solve a good chunk of our problems.

    By conceding on this point out even willing to at least negotiate the threshold they could have controlled the narrative. They once again allowed themselves to be pictured as the uncooperative children of congress.

    • That and they allow themselves to be perceived as the party of the rich.

      • Jarret R. says:

        There’s no perception about it. Who owns the government? The plutocrats who got an entire political party to wage legislative war over a single-digit tax increase. There is no better example of why plutocracy is incompatible with democracy.

  2. Suzicue says:

    Thanks for the info on this. Definitely consolidates it for me, as I have been sick the past few days and unable to keep up with what’s going on. Your last paragraph says it all, friend.

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