Tuesday, January 1, 2013

BOEHNER YEA CANTOR AND A 150 REPUBLICANS VOTED NAYE ON HB 8 THAT RAISES TAXES

The 257-167 vote culminated a day of WILL THE Republicans vote to raise taxes or won’t they. Speaker John Boehner (R-Ohio) voted in favor of the legislation, splitting with House Majority Leader Eric Cantor (R-Va.) and Majority Whip Kevin McCarthy (R-Calif.). Rep. Paul Ryan (Wis.), the Budget Committee chairman and former Republican vice presidential nominee, voted yes. 

House Majority Leader Eric Cantor, R-Va., left, with Speaker of the House John Boehner, R-Ohio, enters a second Republican caucus meeting at the U.S. Capitol in Washington, on Tuesday, Jan. 1, 2013.

The 257-167 vote culminated a day of WILL THE Republicans vote to raise taxes or won’t they. Speaker John Boehner (R-Ohio) voted in favor of the legislation, splitting with House Majority Leader Eric Cantor (R-Va.) and Majority Whip Kevin McCarthy (R-Calif.). Rep. Paul Ryan (Wis.), the Budget Committee chairman and former Republican vice presidential nominee, voted yes. 
Approved 36 hours before the 112th Congress adjourns, the legislation now goes to President Obama for his signature. And Obama heads back to Hawaii.
The bill extends indefinitely marginal tax rates on annual family income up to $450,000, lifts the top capital gains and dividends rates to 20 percent, extends unemployment insurance benefits and a host of other tax provisions. It also raises payroll taxes that will likely revert back to 6.2% from 4.2% for the first $110,000 of income affecting everyone who has a job.
It delays automatic spending cuts for two months, setting up another fiscal showdown over replacing those cuts, raising the debt ceiling and funding the federal government.
Because in addition to the tax and spending stuff, there's all kinds of goodies, like extensions of credits for green energy, and all that stuff in there, that they always put in these things.
1. There's a provision extending a tax policy related to Puerto Rican rum.
2. And a tax credit for 2 and 3 wheel electric vehicles.
3. Something having to do with Diesel Fuel:
4. An extension of some special rules for the film and television business.
5. Some kind of gift to the car-racing world.
ALSO YOU HAVE THE TAX INCREASE IN PAYROLL TAXES Capital Gains and Dividend
Income taxes will stay at current rates for households making less than $450,000 per year ($400,000 for individuals).  This is a huge tax cut relative to the Fiscal Cliff tax rates, which would have increased taxes for everyone.
* Income taxes for income above $450,000 ($400,000 for individuals) will revert to the Clinton era 39.6% from the current 35%. These households constitute fewer than 1% of American households.
* Capital gains and dividend taxes for households earning over $450,000 will rise from 15% to 20%.  This income will also be hit with the 3.8% surcharge for Obamacare, so the full increase will be from 15% to 23.8%. For dividends, this is still a massive cut from the Clinton-era rates of 40%.
* Some tax deductions for households earning more than $250,000 will be phased out. So, on a net basis, taxes may rise for about 2% of American households.
* The payroll tax will likely revert back to 6.2% from 4.2% for the first $110,000 of income (per the Washington Post). This will effectively increase taxes on almost everyone.
* The estate tax will stay basically the same: The threshold for taxable estates will remain at $5 million, with a 40% tax rate over that level.
All of these tax rates would be "permanent," meaning that Congress would have to agree to change them. This is a big deal. Almost every fiscal agreement reached by Congress since the Bush tax cuts of 2001 has been scheduled to phase out at a future date.
* Some tax cuts for middle- and lower-income households would be extended for 5 years.  These include a child credit, the earned income tax credit, and a tuition credit.
* Unemployment benefits would be extended for one year.
All these changes are expected to raise about $600 billion in new revenue over 10 years versus current tax levels. That's obviously far less revenue than would be raised if the Fiscal Cliff tax rates were enacted.

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