Fiscal Cliff Update– December 31, 2012

While a deal is in sight to prevent a tax hike on most taxpayers, a deal is not done as of yet.

Rumor has it that the tax increases will apply to individuals at $400,000 of income and couples at $450,000 of income. In his address this afternoon, The President did mention that this tax increase will be permanent. He also seemed to indicate that the child tax credit, tuition credit, clean energy credits, unemployment insurance and R&D credit will be extended.He also mentioned that the automatic spending cuts will likely be postponed for a couple of months.There is talk of the estate tax going up, but there were no indications as to what it might be.

The President indicated that he wanted a larger deal to get done, but that will not happen.He urged everyone to work together to get a deal done in stages that will take a balanced approach to deficit reduction through cutting expenses and raising revenue from the wealthy taxpayers.