House Approves Fiscal Cliff Tax Deal

The House last night approved H.R. 8 by a vote of 257-167 to avert the fiscal cliff.  The bill now goes to the White House for President Obama's signature.  Highlights of the bill include:

• Raise the marginal tax rate to 39.6% on income over $450,000 (joint) and $400,000 (single).
• Raise the tax rate on dividends and long term capital gains to 20% on taxpayers with income over $450,000 (joint) and $400,000 (single).  The top rate would remain 15% for taxpayers with lower incomes.
• Estate and gift tax:  $5 million exemption (inflation-adjusted) and 40% rate.
• Permanent and retroactive patch for the AMT.
• Return of the exemption and itemized deduction phase-outs on taxpayers with income over $300,000 (joint) and $250,000 (single).
• One-year extension of 50% bonus depreciation.
• Extension of various tax extenders.

Documents:

• Legislative Language
• Senate Finance Committee Summary
• White House Fact Sheet
• President Obama Statement.
• Congressional Budget Office Revenue Estimate
• Joint Committee on Taxation Reveue Estimate

Commentary:

• Len Burman (Syracuse), Senate Bill Averts Fiscal Cliff--For Now--While Ignoring our Short- and Long-Term Fiscal Problems
• CCH, Tax Briefing
• Stephen J. Entin (Tax Foundation), Modeling the Economic and Distributional Effects of the Senate Tax Bill
• Howard Gleckman (Tax Policy Center), Congress Kicks the Fiscal Can off the Front Stoop
• Joseph Henchman (Tax Foundation), Details of the Fiscal Cliff Tax Deal
• Ezra Klein (Washington Post), Wonkbook: Everything You Need to Know About the Fiscal Cliff Deal
• Greg Mankiw (Harvard), President Rejects His Bipartisan Bowles-Simpson Commission
• Greg Mankiw (Harvard), The Neverending Quest for a More Redistributionist Tax System
• David Malpass (WSJ op-ed), Nothing Is Certain Except More Debt and Taxes,
• New York Times, Tax Deal’s Passage Ends Latest Standoff
• Dan Shaviro (NYU), The Fiscal Cliff Deal
• Joe Thorndike (Tax Analysts), Is Obama the Worst Legislative Negotiator of the Last Century?
• Wall Street Journal, Congress Passes Cliff Deal
• Wall Street Journal, High Earners Facing First Major Tax Increase in Years
• Wall Street Journal editorial, Obama's Tax Bill Comes Due
• Washington Post, Congress Approves ‘Fiscal Cliff’ Measure
• Washington Post, Tea Party Backers Swallow a Bitter Pill in ‘Cliff’ Bill
• Robert Wood (Forbes), Five Things Everyone Should Know about the Fiscal Cliff Tax Deal
• George Yin (Virginia), 'Fiscal Cliff' Compromise Is a Bad Deal