FACTBOX - Key points in tentative U.S. deal to avert 'fiscal cliff'

Tue Jan 1, 2013 4:10am IST

United States money printing plates are seen at the Museum of American Finance in New York October 15, 2010. REUTERS/Shannon Stapleton/Files

United States money printing plates are seen at the Museum of American Finance in New York October 15, 2010.

Credit: Reuters/Shannon Stapleton/Files

Related Topics

REUTERS - Hours before a deadline for $600 billion in automatic tax increases and spending cuts, U.S. Senate leaders on Monday were working out the details of a deal to avert the so-called "fiscal cliff."

President Barack Obama cautioned there were still "issues left to resolve" in the tentative deal, which still needs approval from the Senate as well as the Republican-led House of Representatives.

Here are details of the deal as it stood at midday on Monday, according to a source familiar with the talks:

* Postpones the $1.2 trillion in automatic spending cuts over 10 years, known as the "sequester." But there was not yet agreement about how long Congress would have to negotiate spending cuts and revenue increases to replace the sequester.

* Raises $600 billion in revenue over 10 years through a series of tax increases on wealthier Americans.

* Permanently extends tax cuts made in 2001 by Republican former President George W. Bush for income below $400,000 per individual, or $450,000 per family. Income above that level would be taxed at 39.6 percent, up from the current top rate of 35 percent.

* Above that income threshold, capital gains and dividends tax rates would return to 20 percent, from 15 percent.

* Caps personal exemptions and itemized deductions for income above $250,000, or $300,000 per household.

* Raises estate tax rate to 40 percent for estates of more than $10 million per couple, up from the current level of 35 percent.

* Includes a permanent fix for the alternative minimum tax.

* Extends unemployment insurance benefits for one year for 2 million people.

* Extends child tax credit, earned income tax credit, and tuition tax credit for five years.

* Extends research and experimentation tax credit, and the wind production tax credit through the end of 2013. Extends 50 percent bonus depreciation for one year.

* Avoids a cut in payments to doctors treating patients on Medicare - the so-called "doc fix."

(Reporting by Jeff Mason, Mark Felsenthal, Roberta Rampton, Kim Dixon; Editing by Mohammad Zargham)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Market at Record

Market at Record

Sensex, Nifty hit record highs; reforms outpace hawkish Fed.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Samsung Results

Samsung Results

Smartphone woes drag Samsung Elec Q3 profit to more than 3-year low.  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage