A few hours before the first business day of 2013, the House approved a bill to avert the Fiscal Cliff. Although some last minute effort was mustered by House Republicans to include another $330 billion in spending cuts, the Senate was rumored to have preemptively refused to take up any bill amended by the House. The Senate's original version passed the House 257 to 167, and although it's clearly not the "grand bargain" that it might have been, it is "something," and markets will spend most of today sorting through their reaction to the 157 pages of legislation.
A few of the vital details that we think we know:
- Top tax rate rises to 39.6 from 35 percent for couples over $450k and individuals over $400k
- Automatic spending cuts delayed by two months
- Capital gains tax rising to 20% plus 3.8% that was already slated and independent of the Cliff, for a total of 23.8%
- Clinton-era limits on personal exemptionss and itemized deductions would be restored
- Payroll Tax Cut allowed to expire, effectively raising taxes on nearly 80% of households