The Two Sides Are Now Absurdly Close On A Fiscal Cliff Deal — Here's The Latest Offer

[xchrom]

http://www.businessinsider.com/fiscal-cliff-deal-2012-12

***SNIP

* The Democrats agreed to raise the income threshold for tax increases to $450,000 a year (couples) from the prior $250,000. The Republicans are insisting on $550,000 threshold. This is a massive tax cut for almost the entire country relative to the rates that will otherwise take effect on January 1. (So agree on $500,000 already and call it a day.)

* However, to the Republicans' chagrin, the Democrats insist on raise capital gains and dividend taxes to 20% on households over $250,000 and reducing some of the allowable deductions. Importantly, this, too, is a massive tax cut relative to the scheduled changes, which would boost dividend taxes to 40% on incomes over $250,000.

* The Democrats conceded on the estate tax: They'll keep the threshold for taxable estates at $5 million, with a 35% rate over that level. This, again, is a massive tax cut over current law, in which the threshold will drop to $1 million with a much higher rate.

* The Democrats' offer would permanently protect middle-class households from the Alternative Minimum Tax. No details on how this would work.


Read more: http://www.businessinsider.com/fiscal-cliff-deal-2012-12#ixzz2GdZA4qSI

[vi5]

1. I suppose....

As long as no SS cuts, and as long as no medicare/medicaid cuts that I'd be fine with that. And as long as the debt ceiling is raised so we don't have to go through this charade again.

[kentuck]

6. Oh, you will go thru it again and again....

with a deal like this. It sucks.

[vi5]

10. In that case....

No deal. No deal is definitely my preference. I think our best bet is going over the cliff and then putting the GOP on the spot in the new year once the tax cuts have expired and the defense cuts have taken place. But I recognize that our "pragmatic", "bipartisan" leaders aren't going to let that happen.

[Tutonic]

2. No deal.

And thank you Harry Reid and Nancy Pelosi--you are two of the best. SS and Medicare are safe. Mithc McConnel is not.

[JCMach1]

3. grrrrrrrrrrrrrrrrrrrrrrrr

[xchrom]

4. +1

[kentuck]

5. How does this affect the debt and deficit?

It will go up by a huge amount and they will be back for some more of the same.

It's a raw deal.

[alcibiades_mystery]

7. I'd prefer $388,500 to be the line in the sand on rate increases

But the increased rate on dividends really does offset that a bit - drawing additional revenues from the top 2% of the population where the rate line at $450,000 or $500,000 and no other revenues would not. Obviously would like to have estate as well, but both these features maintain the principle that the very wealthy should pay more.

If we review the Republican position, we see how eroded their defense is:

1) They insisted on no tax RATE increase PERIOD. They would find revenue other ways. They abandoned this position.

2) Having abandoned the "No rate Increase" position, they tried to set the rate at $1,000,000 or greater in income, and no other changes. This position, too, has fallen.

3) There was a HuffPo story this weekend that suggested the new Republican position was $500,000. Apparently, it is $550,000, but they might accept a capital gains increase alongside that.

When you look at where they started, you really see how far they've fallen. meanwhile, the Dem position started at yes on rates, and Rate at $250,000, and has apparently moved up to $450,000. That means no tax rate increases on the middle class, and only a slight movement up in brackets. Moreover, when a capital gains rate is included in the rate changes, you draw revenue from top incomes at roughly the level you would if the rate was something like $350,000, so the actual uptick is even more slight. The rate is a way for GOPers to save face. The capital gains increase may actually offset the income rate completely back down to $250,000.

[BeyondGeography]

8. Sounds piddly enough to git-r-done

[BlueStreak]

9. Go over the damn cliff and you get this stuff for free

I don't understand why there is any negotiation for these items. If we do nothing today, everything goes up tomorrow, then there can be a negotiation about which taxes to lower. The only thing on that list that we don't get automatically is the fix to AMT.

This is Alice in Wonderland stuff. It looks like Obama's legendary negotiating skills have spread to Reid and Pelosi.

http://negotiatingwithobama.tumblr.com/