Valdosta Daily Times

Top News

December 2, 2012

House and Senate sit on tax bills the other passed

WASHINGTON — It may not sound like it from the rhetoric, but both the House and Senate already have passed separate bills to delay big tax increases awaiting nearly every taxpayer next year if Congress and the White House can’t agree on a plan to avert the “fiscal cliff.”

The Democratic-controlled Senate passed a bill in July that would extend many of the expiring George W. Bush-era tax cuts for middle-income families, while letting taxes go up for individuals who make more than $200,000 and married couples making more than $250,000.

The Republican-led House passed a bill in August that would extend the tax cuts for just about everyone.

Republican leaders in Congress say they are willing to accept higher taxes on the wealthy, but only by reducing or eliminating credits, deductions and exemptions. They adamantly oppose higher tax rates, which Democratic leaders are demanding.

Leaders from each party said their bill should be the starting point for finding a solution in the next few weeks. Both bills would extend tax cuts through next year. The Senate bill would save taxpayers about $250 billion, according to congressional estimates. The House bill would save taxpayers about $400 billion.

A look at the specifics of each bill:

Tax Rates

Senate: Extends the Bush tax cuts for middle-and low-income families, while letting the top two income tax rates increase from 33 percent to 36 percent and from 35 percent to 39.6 percent. The 33 percent rate would be applied to income above $200,000 for individuals and $250,000 for married couples filing jointly. The top tax rate is applied to incomes above about $390,000.

House: Extends all the Bush tax rates through 2013, for wealthy, middle-income and low-income families.

———

Investment Income

Senate: Raises the top tax rate on capital gains and qualified dividends from 15 percent to 20 percent.

House: Keeps the top tax rate on capital gains and qualified dividends at 15 percent.

———

Payroll Tax

Neither bill addressed the payroll tax cut, which reduced the Social Security payroll tax paid by workers from 6.2 percent to 4.2 percent in 2011 and 2012. If the tax cut expires, a typical worker making $50,000 in wages would get a $1,000 tax increase next year.

———

Estate Taxes

Senate: Does not address the estate tax, allowing the top rate to increase from 35 percent to 55 percent. Currently, the first $5.1 million of an estate is exempt from the federal estate tax; the exemption rises to $10.2 million for married couples. If the tax cut expires, the exemption would be reduced to $1 million for individuals and $2 million for couples.

House: Extends the top rate of 35 percent through 2013, with the larger exemption.

———

Child Tax Credit

Both bills extend the $1,000-per-child tax credit through 2013. If Congress does not act, the tax credit is scheduled to revert to $500 per child next year.

Senate: Extends a 2009 provision that makes the child tax credit available to more families that don’t make enough money to owe federal income taxes.

———

Earned Income Tax Credit:

Both bills extend a more generous credit first enacted under Bush. The EITC provides tax credits to low-income families based on their income and number of children. The credits are available as payments to many families that don’t make enough money to owe federal income taxes.

Senate: Extends a 2009 provision that makes the credit more generous for families with three or more children.

———

Education tax breaks

Both bills extend more generous tax deductions for interest on student loans and exemptions for employer-provided educational assistance.

Senate: Extends a tax credit of up to $2,500 a year for college costs, first enacted in 2009.

———

Alternative Minimum Tax

Both bills spare millions of middle-income families from paying the alternative minimum tax for 2012. The tax was first enacted in 1969 to make sure higher-income taxpayers could not use tax breaks to avoid paying any federal income tax. The income limits, however, were not adjusted for inflation, so Congress routinely fixes the law to spare middle-income families.

Congress has yet to patch the law for 2012. So if lawmakers don’t act, about 28 million middle-income families will face unexpected tax increases averaging more $3,000 when they file their 2012 tax returns next spring.

1
Text Only
Top News
  • Stowaway teen forces review of airport security

    A 15-year-old boy found his way onto an airport’s tarmac and climbed into a jetliner’s wheel well, then flew for five freezing hours to Hawaii — a misadventure that forced authorities to take a hard look at the security system that protects the nation’s airline fleet.

    April 22, 2014

  • South Korea Ship Sink_Rich copy.jpg Death count in ferry sinking tops 100

    One by one, coast guard officers carried the newly arrived bodies covered in white sheets from a boat to a tent on the dock of this island, the first step in identifying a sharply rising number of corpses from a South Korean ferry that sank nearly a week ago.

    April 22, 2014 1 Photo

  • AP520422034 copy.jpg Today in History for Tuesday, April 22, 2014

    Today is Tuesday, April 22, the 112th day of 2014. There are 253 days left in the year.

    April 22, 2014 1 Photo

  • Commission to vote to purchase new computers

    Lowndes County commissioners discussed replacing outdated computers, a bid for an emergency bypass pump, an annexation request from the City of Hahira, a juvenile justice grant application, and an appointment to the dangerous dog board.

    April 22, 2014

  • KLVB receives Governor’s Circle Recognition Award

    Keep Lowndes/Valdosta Beautiful received the Governor’s Circle Award. These inaugural, statewide awards were presented by Gov. Nathan Deal at the State Capitol .

    April 22, 2014

  • Readers’ Forum reviews ‘The Art Forger’

     “Fascinating” is the word to describe the world of art forgery as revealed by guest reviewer Laura Hughes to Readers’ Forum.

    April 22, 2014

  • Immigration _Rich copy.jpg DHS secretary re-evaluating deportation priorities

    Homeland Security Secretary Jeh Johnson said Wednesday he’s re-evaluating the Obama administration’s deportation priorities to make certain they’re focused on national security, public safety and border security, amid growing pressure from the Latino community and President Barack Obama’s fellow Democrats. 

    April 22, 2014 1 Photo

  • Rethinking Pot 420_Rich copy.jpg Public smoke-out marks pot holiday in Colorado

    Tens of thousands of revelers raised joints, pipes and vaporizer devices to the sky Sunday at a central Denver park in a defiant toast to the April 20 pot holiday, a once-underground celebration that stepped into the mainstream in the first state in the nation to legalize recreational marijuana.

    April 21, 2014 1 Photo

  • Submarine Sleep Sched_Rich copy.jpg Navy OKs changes for submariners’ sleep schedules

    With no sunlight to set day apart from night on a submarine, the U.S. Navy for decades has staggered sailors’ working hours on schedules with little resemblance to life above the ocean’s surface.

    April 21, 2014 1 Photo

  • South Korea Ship Sink_Rich copy.jpg Grim work for families as more bodies discovered

    There are no names listed as relatives huddle around signboards to identify bodies from a sunken ferry. Just the slimmest of clues about mostly young lives now lost. Many favored hoodies and track pants. One girl painted her fingernails red and toenails black. Another had braces on her teeth.

    April 21, 2014 1 Photo

Top News
Poll

Given the amount of rain recently, what's your favorite “rain” song?

Singing in the Rain
Purple Rain
Have You Ever Seen the Rain?
November Rain
Rainy Night in Georgia
Other
     View Results