Millionaires and billionaires will have to pay higher permanent tax increases for New Year.
By H. Nelson Goodson
January 2, 2013
Washington D.C. - On late Tuesday, a bipartisan majority vote of 257-167 just after 9:00 p.m., Mountain Time, the U.S. House of Representatives passed the American Taxpayer Relief Act of 2012. The act was also approved by the U.S. Senate earlier and President Barack H. Obama will sign it into law. The bipartisan tax relief act approval avoids a fiscal cliff for the next several months that would have turned around the gradual growth of the economy back into a recession.
The middle class won't see an increase in taxes, but those making more than $450,000 will see a tax hike increase.
American taxpayers making less than $400,000 and couples earning less than $450,000 will keep the Bush era tax cuts permanently. The tax cuts will effect 84 percent of the working class in the U.S.
Millionaires and billionaires who represent the top 2 percent of the wealthy will also get a permanent tax rate increase and less tax benefits to help lower the federal deficit.
It's the first time in 20 years, the wealthy 2 percent of taxpayers that had paid less taxes through last two decades will face and get a tax hike increase.
The White House blog posted the following statement, "This is the first time in twenty years that a bipartisan agreement has increased tax rates on the wealthy.
Additionally, this deal ensures that America will continue to invest in education, clean energy, and manufacturing to strengthen our economy and the middle class.
As President Obama noted in a statement about the deal, while neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country. And the President looks forward to working with Republicans to reduce the deficit in a balanced and bipartisan way.
The agreement passed by an overwhelming bipartisan majority in the Senate last night permanently extends the middle-class tax cuts and also extends credits for working families. It provides additional measures to protect families and promote economic growth. The lower tax rates, an expanded Child Tax Credit, and marriage penalty relief will provide certainty for 114 million households and together will prevent the typical family of four from seeing a $2,200 tax increase.
By raising income tax rates on the wealthiest and keeping taxes low for the middle class, it means we will now have the most progressive tax code in decades. The agreement also prevents two million people from losing unemployment insurance benefits in January by extending emergency UI benefits for one year.
Tax credits that encourage the production of clean domestic energy, such as the Production Tax Credit (PTC), will be extended through the end of the year. And businesses will get to immediately write off 50 percent of capital investments made next year, helping to create jobs in manufacturing and other sectors.
The deal also postpones the sequester for two months, which will give Congress time to work on a balanced plan to prevent the automatic spending cuts that would threaten our national security and slash investments that build our economy. The postponement is paid for with $1 of revenue for every $1 of spending, with the spending balanced between defense and domestic: The agreement saves $24 billion, half in revenue and half from spending cuts which are divided equally between defense and nondefense," according to the White House blog.
