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Senate Passes 'Fiscal Cliff' Deal; House Could Vote Tuesday

Taxes to increase for those earning $400,000 or more.

Talk about last-minute. The Senate passed a deal to avert the fiscal cliff on a 89-8 vote almost two hours into the New Year.

The Senate package would put off budget cuts for two months and preserve Bush-era income tax cuts for individuals earning less than $400,000. For couples earning less than $450,000 the tax cuts would also remain.

Senate Minority Leader Mitch McConnell, R-Kentucky, said it shouldn't have taken so long to get an agreement. Still, he's proud of the progress.

"We've done some good for the country," he said. "Now it's time to stop Washington's out-of-control spending."

The measure will now head to the Republican-led House for a vote as soon as Tuesday.

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The Senate package includes:

  • Tax rates on income above $400,000 for individuals and $450,000 for couples goes back to the Clinton-era rate of 39.6 percet (currently 35 percent
  • Itemized deductions would cap at $250,000 for individuals and $300,000 for couples ($600 billion in additional revenue over 10 years)
  • Taxes on inherited estates will go up to 40 percent from 35 percent
  • Unemployment insurance would be extended for a year
  • Alternative minimum tax would be permanently adjusted for inflation
  • Child care, tuition and research and development tax credits would be renewed.
  • "Doc Fix," reimbursements for doctors who take Medicare patients, will continue, but it won't be paid for out of the Obamacare

Congress avoided a Milk Cliff with last minute measures passed to prevent milk prices from shooting upwards $8 per gallon.

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