The U.S. House of Representatives passed the Senate's "fiscal cliff" deal Tuesday night, averting a potential calamity for many taxpayers and setting new tax rates for some.
Highlights of the agreement include:
- Making permanent the Bush-era tax cuts for incomes under $400,000 for individuals and $450,000 for couples.
- Allowing the Bush-era tax cuts to expire for incomes above those levels, meaning the tax rate for top incomes will raise from 35 percent to 39.6 percent.
- Extension of unemployment benefits for one year.
- Extension of the child tax credit and earned income tax credit.
- Expiration of the payroll tax cut.
“President Obama and the Senate came to an agreement on a deal to prevent the country from going over the fiscal cliff," Congressman John Tierney wrote in a statement Wednesday morning. Tierney voted in favor of the bill. "It was the only bill brought to the House floor for a vote and it is imperfect. However, this legislation is a first step and it will ensure that millions of middle-class Americans and small businesses will not have the largest tax increase in the history of our country. Meanwhile, millionaires and billionaires will pay their fair share to reduce the deficit through a combination of permanent tax rate increases and reduced benefits."
The bill, passed overwhelmingly by the Senate and supported by both Sens. John Kerry and Scott Brown of Massachusetts, was on shaky ground in the House Tuesday as many Republicans and a few Democrats spoke of rejecting it. But when the vote went to the floor, the bill passed by a vote of 257 to 167.
"This bipartisan agreement stopped the country from truly going over the cliff and allows us to continue to invest in education, clean energy and manufacturing that creates jobs and strengthens the middle class as we address our ongoing fiscal challenges,” Tierney said.