Here are some of the highlights of the tax agreement said to be reached between McConnell and Biden today:
• Income tax: permanent extension of tax rates for individuals earning below $400,000, and for couples filing jointly below $450,000. Above that, income taxes to rise to 39.6%, up from the current 35%
• Capital gains and dividends: permanent 15% tax rate for individuals earning below $400,000 or households below $450,000, and a 20% tax rate for those earning more than $400,000 or $450,000.
• Social Security payroll "holiday": two percentage point cut in the payroll tax lapses, increasing the payroll tax to 6.2%.
• Personal exemptions and itemised tax deductions: Personal Exemption Phaseout (PEP) and Pease limitation to be permanently enacted on individuals earning more than $250,000 or households earning more than $300,000.
• Unemployment benefits: extends benefits for the long-term unemployed for one year.
• Estate tax: permanent change to a 40% tax rate on estates valued above $5m and family estates of $10m, an increase from the current rate of 35%
• Alternative minimum tax: permanently fixes and indexes the AMT for inflation, to prevent middle and upper-middle income taxpayers from incurring higher tax bills.
• Tax credits: extends for five years the child tax credit, earned income tax credit, and an up to $2,500 tax credit for college tuition. Extends for one year accelerated "bonus" depreciation of business investments in new property and equipment.
• Medicare payments: stops a 27% cut in Medicare payments to doctors for one year dating back to 1997.
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Hier die "cliff notes" vom Deal: