Monday, December 31, 2012

The Two Sides Are Now Absurdly Close On A Fiscal Cliff Deal — Here's The Latest Offer

From Clusterstock’s Main Man, Henry Blodget: The Democrats made several key concessions yesterday in the Fiscal Cliff negotiations.  As a result, the two sides are absurdly close together. If we don't get a deal at this point, the entire country will be justified in being outraged.  Here's the Democrats' latest offer, as reported by Lori Montgomery and Paul Kane of the Washington Post:

* The Democrats agreed to raise the income threshold for tax increases to $450,000 a year (couples) from the prior $250,000. The Republicans are insisting on $550,000 threshold. This is a massive tax cut for almost the entire country relative to the rates that will otherwise take effect on January 1. (So agree on $500,000 already and call it a day.)

* However, to the Republicans' chagrin, the Democrats insist on raise capital gains and dividend taxes to 20% on households over $250,000 and reducing some of the allowable deductions. Importantly, this, too, is a massive tax cut relative to the scheduled changes, which would boost dividend taxes to 40% on incomes over $250,000….

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