What's on the table now in 'fiscal cliff' talks

Published on NewsOK Modified: December 20, 2012 at 8:34 am •  Published: December 20, 2012
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An update on the latest offers on the table in negotiations to avert a year-end avalanche of federal tax increases and spending cuts known as the "fiscal cliff":

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INCOME TAXES

House Speaker John Boehner would allow income tax rates to rise for people making more than $1 million per year and would hold rates where they are for everyone making less. The top rate on income exceeding $1 million would go from 35 percent to 39.6 percent.

President Barack Obama would freeze income tax rates for taxpayers making $400,000 or less and raise them for people making more.

The two sides are moving closer together. Previously, the Republican House leader opposed allowing any tax rates to go up; Obama wanted higher taxes for individual income above $200,000, or $250,000 for couples.

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PAYROLL TAX

Obama has dropped his proposal to extend a temporary cut in Social Security payroll taxes paid by 163 million workers. Republicans want that tax to go back up.

Raising the payroll tax by 2 percentage points to its old level would cost a worker making $50,000 a year another $1,000 — or a little more than $19 per week — during 2013.

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SOCIAL SECURITY

Obama is offering to reduce cost-of-living increases for Social Security recipients. Republicans have been seeking this as a key to long-term deficit reduction. But many congressional Democrats oppose it.

Government pensions and veterans' benefits would also get smaller cost-of-living increases.

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