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.
In the end, 85 Republicans voted for the fiscal cliff bill and 151 voted no.
There were 172 Democratic yes votes, and 16 Democrats voted no. See how your elected official voted.
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