CT Politics

Connecticut Politics

Mitch McConnell: “very, very close” and tax part done

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Senate Republican leader Mitch McConnell of Kentucky, the chief negotiator with Vice President Joe Biden, said a deal on the fiscal cliff is “very, very close,” with an agreement on the main issue, taxes, in hand.

McConnell said the spending cuts in the sequester can wait, and urged everyone to take the deal on taxes, which he said are the first priority because taxes will go up across the board at midnight. He said he agreed with Obama that taxes are the first priority.

“We can do this,” McConnell said. “We must do this.”

But McConnell may have a hard time selling this. Sen. John McCain, R-Ariz., came to the Senate floor furious with Obama for making jokes and mocking Congress a few minutes ago, saying Obama was poisoning the deal for House Republicans. Sen. Bob Corker, R-Tenn., just spoke saying he was upset that the spending cuts are not in the deal, but tax increases are. Liberals such as Sen. Tom Harkin, D-Iowa, appear to be unhappy too.

Some reporting has suggested keeping a close eye on liberals from high income states, such as Barbara Boxer of California, who may be happy with kicking up the threshold on higher income taxes from Obama’s $250,000. The deal appears to increase tax rates from 35 percent to the Clinton-era 39.6 percent on individuals earning more than $400,000 and couples earning $450,000. Capital gains and dividends for people in those brackets would also rise from 15 percent to 20 percent.

It appears the estate tax will rise from 35 percent to 40 percent, but the $5 million individual exemption will remain. These would be permanent, not temporary, like the Bush tax cuts and the extension Obama agreed to in 2010.

Obama indicated that clean energy tax breaks are preserved.

Categories: Fiscal Cliff
Carolyn Lochhead

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