Fiscal Cliff Notes
Why Most Tax Deductions Will Survive the Cliff
Tuesday, November 20, 2012 - 11:12am
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There’s a reason why few politicians outline which tax loopholes they would close. The majority of Americans—and not just millionaires with offshore bank accounts—benefit from them, reports Politico’s Lauren French.

These are likely to survive fiscal cliff negotiations and include employer-sponsored health insurance, the exclusion of employer pension benefits and mortgage interest deductions, among others. According to the Joint Committee on Taxation figures, the top 10 would bring in an extra $834 billion per year.

Top five expenditures and how much each costs per year:
Exclusion of employer-sponsored health insurance- $164.2 billion
Exclusion of employer pension benefits - $162.7 billion
Mortgage interest deduction - $99.8 billion
Exclusion of Medicare benefits -$76.2 billion
Lower capital gains rates - $71.4 billion
The earned income tax credit - $58.4 billion
Deduction of state and local income taxes - $54 billion
Exclusion of gains at death and the gift carryover exclusion -$51.9 billion
Deduction of charitable contributions - $51.6 billion
Exclusion of employer benefits under so-called cafeteria plans -$43.8 billion

Read more at Politico


WEALTHIEST AMERICANS FACE BIGGEST HIT   The tax hikes being pushed by President Obama start for those making $250,000 a year, but they really take a bite of the incomes of millionaires, writes The New York Times’ David Kocieniewski. Taxpayers earning more than $1 million per year could see an average hike of $184,504, while those earning between $200,000 to $500,000 could face an increase of $4,446 on average per year, according to a new study released by the Tax Policy Center.

Read more at The New York Times


AMERICANS PITCH IN $8 MILLION TO REDUCE THE DEBT
It’s perfectly legal to contribute additional money to the government to reduce the debt. And donations to do that have already more than doubled compared to last year, reaching $8 million so far this year.

Of course, $8 million is a drop in the bucket compared to the $1.1 trillion deficit the United States accrued this year alone, not to mention the grand total of the outstanding debt, which stands at more than $16 trillion.

Diane Lim Rogers, chief economist at the Concord Coalition, a grassroots organization focused on eliminating federal budget deficits, believes that donations are up because of more donations from a small group of wealthy people signaling that they are willing to pay more in taxes to help narrow the national debt.

Read more at CNN Money


MORGAN STANLEY: ECONOMY ‘STUCK IN THE TWILIGHT ZONE’ In his 2013 Outlook, Morgan Stanley's Joachim Fels anticipates that the global economy will remain 'Stuck In The Twilight' zone of mediocre growth, and high dependence on government action. Fels said he expects global growth to be around 3.1 percent, and U.S. growth will stay flat.

Read more at Business Insider

For more news on the approaching fiscal cliff, follow us on Twitter @Fiscalcliffnote

Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.