The Senate measure of HR 8 did little to rein in huge annual budget deficits that have helped push the U.S. debt to $16.4 trillion. It would raise $620 billion in tax revenue over the coming decade.
Under the agreement, tax rates would jump to 39.6 percent from 35 percent for individual incomes over $400,000 and couples over $450,000.
Taxes on capital gains and dividends over $400,000 for individuals and $450,000 for couples would be taxed at 20 percent, up from 15 percent.
The deal would reinstate provisions to tax law that phase out personal exemptions and itemized deductions, beginning at $250,000 for single people and $300,000 for couples.
The estate tax would also rise. The value of estates over $5 million would be taxed at 40 percent, up from 35 percent. The lifetime exemption level would be indexed for inflation.
The 2% social security payroll tax holiday is allowed to expire. But many expiring provisions are extended, some for as long as five years:
Under the deal, the new rates on income, investment and inheritances would be permanent, as would a provision to stop the alternative minimum tax from hitting middle-class families, setting AMT exemption to $78,750 for married couples and $50,600 for singles, with inflation index adjustments.
The bill would also extend jobless benefits for the long-term unemployed for an additional year at a cost of $30 billion, and would spend $31 billion to prevent a 27 percent cut in Medicare payments to doctors.
Another $64 billion would go to renew tax breaks for businesses and for renewable energy purposes, like tax credits for energy-efficient appliances.
Click http://i2.cdn.turner.com/cnn/2013/images/01/01/american.taxpayer.relief.act.pdf to read a copy of the Senate bill.
Click http://tax.cchgroup.com/downloads/files/pdfs/legislation/ATPR.pdf for a CCH explanation of the new American Taxpayer Relief Act of 2012
Under the agreement, tax rates would jump to 39.6 percent from 35 percent for individual incomes over $400,000 and couples over $450,000.
Taxes on capital gains and dividends over $400,000 for individuals and $450,000 for couples would be taxed at 20 percent, up from 15 percent.
The deal would reinstate provisions to tax law that phase out personal exemptions and itemized deductions, beginning at $250,000 for single people and $300,000 for couples.
The estate tax would also rise. The value of estates over $5 million would be taxed at 40 percent, up from 35 percent. The lifetime exemption level would be indexed for inflation.
The 2% social security payroll tax holiday is allowed to expire. But many expiring provisions are extended, some for as long as five years:
- deduction for certain expenses of elementary and secondary school teachers through 2013.
- exclusion from gross income of discharge of qualified principal residence indebtedness through 2013.
- parity for exclusion from income for employer-provided mass transit and parking benefits through 2014.
- mortgage insurance premiums treated as qualified residence interest through 2013.
- deduction of State and local general sales taxes through 2014.
- special rule for contributions of capital gain real property made for conservation purposes through 2013.
- above-the-line deduction for qualified tuition and related expenses through 2013.
- tax-free distributions from individual retirement plans for charitable purposes through 2013.
- American Opportunity Tax Credit, through 2017.
- earned income tax credit, through 2017.
- certain modifications relating to child tax credit for eligible dependent through 2017, permanently increases credit amount from $500 per child to $1,000
Under the deal, the new rates on income, investment and inheritances would be permanent, as would a provision to stop the alternative minimum tax from hitting middle-class families, setting AMT exemption to $78,750 for married couples and $50,600 for singles, with inflation index adjustments.
The bill would also extend jobless benefits for the long-term unemployed for an additional year at a cost of $30 billion, and would spend $31 billion to prevent a 27 percent cut in Medicare payments to doctors.
Another $64 billion would go to renew tax breaks for businesses and for renewable energy purposes, like tax credits for energy-efficient appliances.
Click http://i2.cdn.turner.com/cnn/2013/images/01/01/american.taxpayer.relief.act.pdf to read a copy of the Senate bill.
Click http://tax.cchgroup.com/downloads/files/pdfs/legislation/ATPR.pdf for a CCH explanation of the new American Taxpayer Relief Act of 2012
