Senate Republicans and the White House have reached a deal on the tax portion of the “fiscal cliff” showdown, according to a senior Republican source, but spending remains an outstanding issue.
The basic parameters on the deal are as follows:
– Bush era tax rates would be made permanent on all income below $400,000 for individuals and $450,000 for families.
– The capital gains tax rate would permanently remain at 15 percent for income under $400,000 for individuals and $450,000 for families, and it would go up to 20 percent on income above that.
– There would be a permanent fix to prevent the Alternative Minimum Tax (originally intended to capture more taxes from a small number of millionaires) from hitting tens of millions of middle class families.