Estate tax was raised to 5 million dollars over that 40% tax rate
no tax increase on people earning less than $400k single and $450k a family (Democrats wanted it at $200k for single, $250k for a family). Bush tax cuts are now permanent for 98% of Americans.
we aren't out of the woods yet and it's not much of win for Democrats
http://www.huffingtonpost.com/2012/12/3 ... 48269.html
more is too come in the next two months as far as spending cuts
"Congress would permanently extend the Bush income tax cuts at $400,000 and below, keep the estate tax threshold at $5 million and extend unemployment benefits for one year."
"The deal still requires buy-in from members of both parties, and Biden was set to meet with Senate Democrats Monday night to try to sell them on the package. That could prove challenging given that key progressive groups, including the AFL-CIO, made it clear earlier Monday that they would oppose any deal that raised the income limit for extending the Bush tax cuts above $250,000"
“WHAT COMPROMISE LOOKS LIKE
The GOP did not want to raise income taxes on anyone.
The GOP wanted to tie deep spending cuts into any deal.
The GOP did not want to see extensions in key Democratic favored programs.
It did not get what it wanted.
It did get $150,000 increase in the tax ceiling, and it joined the democrats in supporting several tax credit extensions, and in ending the payroll tax holiday.
The Dems did very well indeed (read on to find out how)..
Here is what the deal does:
A) All wage earners will see their payroll taxes return to 6.2 percent on earnings up to $113,700 in order to return the funding stream to Social Security and Medicare.
B) Individuals who earn more than $400,000 and couples who make more than $450,000 will see income tax rates increase from 35% to 39.6% For people at those income levels, tax rates on capital gains and dividends are expected to rise to 20%, up from15%. In addition to the capital gain and dividend rates, health care reform will levy a new surtax of 3.8% on capital gains for wealthy Americans, pushing up the top capital gains rate to 23.8%.
3) Estate tax rates are poised to rise from 35% to 40% for estates valued at more $5 million.
4) Creation of a permanent inflation "patch" that would shield millions of middle class taxpayers from the AMT (Alternative Minimum Tax that is supposed to guarantee that wealthy taxpayers pay a minimum amount of federal income tax, regardless of deductions, credits or exemptions. In essence, it is a flat tax with two brackets -- 26% and 28%)
4) Extended Measures/Programs:
- Unemployment extended for one year, preserving benefits for 2 million Americans who were at risk for losing benefits at year's end.
- The Child Tax Credit, Earned Income Tax Credit and Obama Opportunity Tax Credit (college tuition credits) will all be extended for five more years.
- One-year extension of the Research and Experimentation Tax Credit and Production Tax Credit, Alternative Energy Credits, along with an extension of the 50 percent Bonus Depreciation for businesses' capital expenditures.
- One-year extension of the DocFix current Medicare reimbursement rates, shielding participating doctors from a potential 27% cut in reimbursements.
AND...It would also temporarily delay the sequester -- i.e., billions of dollars in across-the-board spending cuts -- for another two months....when the debt ceiling debate will be a full force.
It will pass the Senate in a bipartisan vote and Boehner is going to have accept Democratic support in the House (which will weaken him). Not Bad.”
