US law makers agree 11th hour deal on fiscal cliff
The fiscal cliff would have meant automatic tax increases for all Americans and deep cuts in military and discretionary spending.
In an eleventh hour deal US law makers avert the fiscal cliff that would prevent a middle-class tax hike from hitting 98 per cent of all Americans.
According to a senior White House official, President Barack Obama and Republicans sealed a budget deal late on Monday night with Vice President Joe Biden headed to the Capitol Hill to pitch the plan to fellow Democrats.
The Senate was moving towards a vote on the deal either late night or Tuesday noon. This is because Senate, wherein the Republicans enjoy a majority, had been adjourned till Tuesday noon.
The fiscal cliff would have meant automatic tax increases for all Americans and deep cuts in military and discretionary spending.
Senate proposal would put off the cuts for two months and keep the expiring Bush-era tax cuts for individuals earning less than $400,000 or couples earning less than $450,000.
President Barack Obama has long demanded that the threshold be set at $250,000.
Tax rates on income above those levels would go back to the Clinton-era rate of 39.6%, up from the current 35%, and itemized deductions would be capped at $250,000 for individuals and $300,000 for couples.
That would generate an estimated $600 billion in additional revenue over 10 years.
Taxes on inherited estates will go up to 40% from 35%, but the exemption will be indexed to rise with inflation -- a provision the source said was added at the insistence of moderate Democrats.
Analysts however said developments over the fiscal cliff will likely be one of the big issues in financial markets in 2013, especially in the early part, alongside Europe's ongoing efforts to contain its debt crisis and the state of the Chinese economy, now the world's second biggest.
Sumber : Google
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