Highlights of Fiscal Cliff Deal

*** UPDATE WEDNESDAY 11:30 P.M. ***Congressman Blaine Luektemeyer was one of five Missouri representatives to approve the latest fiscal cliff bill. He said it was critical to reverse the largest tax increase in American history. He also mentioned the bill is far from perfect, but he was happy it provides tax relief for the majority of the country. Columbia’s congresswoman Vicky Hartzler voted against the plan. She said it was a hard decision but it all came down to spending cuts. She said “There were some good provisions in the bill and it was tough decision but ultimately I had to make the decision based on what I was hearing from the people of my district, and that goes along with my belief that we have got to quit spending money we don’t have in Washington.” Congressman Sam Graves who represents a Cooper and Howard counties was one of only eight people to not participate in the vote.***UPDATE TUESDAY 10:36 P.M.***Legislation to block the “fiscal cliff” is headed to the White House for President Barack Obama’s signature. The bill will avoid, for now, the major tax increases and government spending cuts that had been scheduled to take effect with the new year.Final approval came in the House on New Year’s Night. The vote was 257 to 167.The Senate passed the bill less than 24 hours earlier.The measure raises tax rates on incomes over $400,000 for individuals and $450,000 for couples, a victory for Obama.It also extends expiring unemployment benefits for the long-term jobless, prevents a cut in fees for doctors who treat Medicare patients and cancels a $900 pay increase due to lawmakers in March.Another provision is designed to prevent a spike in milk prices.***ORIGINAL STORY***WASHINGTON, D.C. (AP) – Highlights are included below of a tentative agreement Monday between the White House and Senate Minority Leader Mitch McConnell, R-Ky., aimed at averting wide tax increases and budget cuts scheduled to take effect in the new year.The measure would raise taxes by about $600 billion over 10 years compared with tax policies that expire at midnight Monday.It would also delay for two months across-the-board spending cuts otherwise set to begin slashing the budgets of the Pentagon and numerous domestic agencies.Some of the main points include:-Income tax rates: Extends decade-old tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6 percent, up from the current 35 percent. Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000.-Estate tax: Estates would be taxed at a top rate of 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35 percent.-Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families would increase from 15 percent to 20 percent.-Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000. The tax was originally designed to ensure that the wealthy did not avoid owing taxes by using loopholes.-Other tax changes: Extends for five years Obama-sought expansions of the child tax credit, earned income tax credit, and an up to $2,500 tax credit for college tuition. Also extends for one year accelerated “bonus” depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity.-Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.-Cuts in Medicare reimbursements to doctors: Blocks a 27 percent cut in Medicare payments to doctors for one year. The cut is the product of an obsolete 1997 budget formula.-Social Security payroll tax cut: Allows a 2 percentage point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2 percent.-Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rules changes on converting traditional individual retirement accounts into Roth IRAs.