Technically, we’re going over the fiscal cliff.
But before you start pulling out your hair, keep in mind that the two parties are “very, very close” to a deal, Senate Majority leader Mitch McConnell said Monday afternoon. And in fact, it could all be resolved Tuesday. The only thing that’s changed is that the House has announced that it has no plans to vote on any fiscal cliff legislation on Monday.
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But, the situation was “very fluid,” as USA Today reports.
How the Deal Is Shaping Up
Our partner Business Insider has the latest on the parts of the deal that have been hammered out so far:
“1. The Bush-era tax cuts will be extended permanently to 39.6 percent for individuals earning more than $400,000 and households earning more than $450,000. That same threshold would be applied for capital gains and dividends, with the top rate going up to 20 percent. Estimated revenue: $370 billion over 10 years.
“2. The estate tax will go up slightly for estates over $5 million, from 35 percent to 40 percent. Estimated revenue: $25 billion in revenue over 10 years.
“3. Personal tax exemptions would be capped at $375,000 for individuals and $425,000 for households. Itemized deductions would be capped at $250,000 and $300,000 respectively. Estimated revenue: $185 billion over 10 years.
“4. A permanent patch in the alternative minimum tax (AMT) and a five-year extension of stimulus tax policies.”
Why Half of Americans Don’t Pay Federal Income TaxWhat’s Left to Negotiate
The sticking point in the negotiations is whether and how to stop $110 billion in across-the-board spending cuts set to go into effect on January 2, according to The New York Times.
So, what’s that about finalizing everything Tuesday?
CNN reports: ”There’s little practical difference in settling the issue Monday night versus Tuesday, House GOP sources said. But if House Republicans approve the bill on Tuesday–when taxes have technically gone up–they can argue they’ve voted for a tax cut to bring rates back down, even after just a few hours, GOP sources said.”
And that would be enough to get enough Republicans to jump on board–and bring us back from the cliff’s edge.