Tell Congress what you think about “Fiscal Cliff” Proposals

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    POPVOX has compiled a list of proposals reportedly under consideration to address the “Fiscal Cliff”.

    Read the proposals, see what others are saying, and tell Congress what you think.

    POPVOX will deliver your message to your Representative and Senators.

What is the “Fiscal Cliff”?

Proposals

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Tax
$- B

35%65%

350 total users

Tax
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A bill to provide a comprehensive deficit reduction plan, and for other purposes.

Source: Sponsor: Sen. Bob Corker

#s3673/112

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$- B

39%61%

125 total users

Tax
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Tax cuts passed in 2001, 2003, and 2010 are set to expire at the end of 2012. Allowing the tax cuts to expire for the 2% of households with incomes over $250,000 per year would return the highest marginal income tax rate from 35% to 39.6% -- reducing the deficit by $849 billion over 10 years. This is a proposal by the President reportedly under consideration during the "Fiscal Cliff" talks. (Source: The White House.)

Source: The President's Budget for FY 2013

#expiringtaxcuts

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$849 B

81%19%

777 total users

Tax
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Limiting itemized income tax deductions at $50,000 and allowing individuals to choose which deductions to claim would affect mostly very high-income taxpayers -- reducing the deficit by $749 billion over 10 years.

Source: Sen. Bob Corker

#deductioncap

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$750 B

80%20%

250 total users

Tax
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Limits the tax rate applied to itemized deductions and tax preferences to 28% from the current maximum of 35%, reducing the deficit by $410 billion over 10 years.

Source: The President’s Budget for FY 2013

#CharitableDeduction

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$410 B

60%39%

689 total users

Tax
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To extend certain tax relief provisions enacted in 2001 and 2003, and to provide for expedited consideration of a bill providing for comprehensive tax reform, and for other purposes.

Source: Sponsor: Rep. David Camp

#hr8/112

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$403 B

96%4%

7186 total users

Government Reform
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Ties cost of living determinations for federal benefits and taxes to the Bureau of Labor Statistics' "chained" Consumer Price Index, which grows more slowly than the standard CPI, reducing the federal deficit by $299 billion over ten years.

Source: Bowles-Simpson recommendations

#ChainedCPI

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$299 B

33%66%

513 total users

Tax
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A bill to amend the Internal Revenue Code of 1986 to provide tax relief to middle-class families.

Source: Sponsor: Sen. Harry Reid

#s3412/112

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$250 B

84%16%

2056 total users

Tax
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An original bill to amend the Internal Revenue Code of 1986 to extend certain expiring provisions.

Source: Sponsor: Sen. Max Baucus

#s3521/112

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$205 B

81%19%

153 total users

Health
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Under current law, drug manufacturers are required to pay specified rebates for drugs dispensed to Medicaid beneficiaries. In contrast, Medicare Part D plan sponsors negotiate with manufacturers to obtain plan-specific rebates at unspecified levels. Allowing Medicare Part D to receive the same rebates that Medicaid receives for brand name and generic drugs would reduce the deficit by $156 billion over 10 years.

Source: The President’s Budget for FY 2013

#PartDRebates

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$156 B

78%22%

106 total users

Tax
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Currently, US businesses can deduct interest they pay on debt incurred to finance overseas investments even though US tax on the investment income may be deferred. The President proposes deferring the interest deduction, limiting the shifting of income to low-tax affiliates and other recommendations to increase taxes on multinational corporations and reduce incentives to shift income and assets overseas -- reducing the deficit by $148 billion over 10 years.

Source: The President’s Budget for FY 2013

#internationaltax

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$148 B

81%19%

117 total users

Health
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Raises the Medicare eligibility age to 67 between 2014 and 2025, reducing the deficit by $124 billion over ten years.

Source: Lieberman-Coburn Health Proposal

#MedicareAge

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$124 B

39%60%

524 total users

Tax
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Reinstates the 2009 Estate Tax rate, which exempts up to $3.5 million in assets, and taxes assets in excess of the cap at 45%. This proposal reduces the deficit by $106 billion over 10 years.

Source: The President’s Budget for FY 2013

#EstateTax

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$106 B

64%36%

642 total users

Tax
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Under the Last-In, First-Out (LIFO) accounting method for inventories, the most recently acquired (or manufactured) goods are treated as being sold during the year. Repealing LIFO for federal income tax purposes would reduce the deficit by $52 billion over 10 years. This is a proposal by the President reportedly under consideration during the "Fiscal Cliff" talks. (Source: The President’s Plan for Economic Growth and Deficit Reduction.)

Source: The President’s Budget for FY 2013

#lifo

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$52 B

71%29%

77 total users

Tax
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Repeals tax preferences for oil and gas beginning in 2013, including: 1) the use of percentage depletion with respect to oil and gas wells; 2) ability to claim the domestic manufacturing deduction; 3) expensing of intangible drilling costs; 4) deduction for tertiary injectant; 5) the exception to passive loss limitations; and 6) two-year amortization of independent producers’ expenditures. Reduces the deficit by $42 billion over ten years.

Source: The President’s Budget for FY 2013

#Oil #Gas

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$42 B

77%23%

793 total users

Health
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Reduces payments to home health and skilled nursing facilities, reducing the deficit by $42 billion over ten years.

Source: The President’s Budget for FY 2013

#PostAcute

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$42 B

18%82%

280 total users

Health
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Under Medicare Parts B and D, certain beneficiaries pay higher premiums as a result of their higher levels of income. Increasing these income-related premiums by 15% and maintaining the income thresholds associated with income-related premiums until 25% of beneficiaries under Parts B and D are subject to these premiums would reduce the deficit by $28 billion over 10 years.

Source: The President’s Budget for FY 2013

#MeansTest

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$28 B

74%26%

112 total users

Tax
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Currently, there is no sector-specific tax applied to financial firms other than general corporate income tax and excise taxes. The proposed Financial Crisis Responsibility Fee would be assessed on certain liabilities of the largest firms in the financial sector -- reducing the deficit by $19 billion over 10 years.

Source: The President’s Budget for FY 2013

#FinCrisisFee

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$19 B

63%36%

96 total users

Tax
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Re-imposes an excise tax of $0.22 to $4.87 per ton on various chemicals, an excise tax of 9.7 cents per barrel of crude or refined petroleum, and a corporate income tax of 0.12% on modified alternative minimum corporate income above $2 million, reducing the deficit by $18 billion over ten years.

Source: The President’s Budget for FY 2013

#Superfund

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$18 B

59%41%

379 total users

Tax
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Treats income on management fees by hedge fund managers as regular income rather than as a capital gains, reducing the deficit by $12.5 billion over ten years.

Source: The President’s Budget for FY 2013

#CarriedInterest

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$13 B

81%19%

553 total users

Tax
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This proposal extends tax cuts for those making less than $1 million, the $1,000 child tax credit, the current estate and gift tax, and section 179 expensing for small businesses ($250,000 and indexed for inflation). Includes permanent AMT adjustment and prevents dividend taxes from being taxed at the highest rates. According to the Joint-Tax Committee, the proposal would cost $4.14 trillion over ten years.

Source: Speaker of the House John Boehner

#PlanB

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$-4140 B

21%79%

85 total users

What is the “Fiscal Cliff”?

The “Fiscal Cliff” refers to the combined effect a number of policies would have on our economy beginning in January 2013. Lowering the national debt over time improves long-term economic growth, but there's an increased risk of recession if the deficit is reduced suddenly, according to the Congressional Budget Office.

These policies include:

TAXES

Expiring tax cuts: Tax legislation passed in 2001, 2003, and 2010 are frequently referred to as the “Bush tax cuts.” These expire on December 31, 2012, reinstating the pre-tax cut rates for income, capital gains, and estate taxes. In addition the Alternative Minimum Tax, which is not adjusted to inflation, would apply to millions more people. See CRS Report on Expiring Tax Provisions.

Expiring payroll tax cut: The 2% Social Security payroll tax holiday expires on December 31, 2012, raising the rate from 4.2 to 6.2% for 160 million Americans.

New taxes enacted in the Affordable Care Act: The Affordable Care Act included tax provisions that will go into effect at the beginning of 2013. See IRS List of tax provisions int he ACA.

SPENDING CUTS

Sequestration: Automatic, across-the-board cuts to federal spending to take effect on January 2, 2013, if Congress does not act on further deficit reduction. The Sequestration requires $109 billion annually in federal spending cuts, resulting in a 9.4% reduction in defense discretionary funding and an 8.2% reduction in nondefense discretionary funding. See Office of Management and Budget List of Planned Cuts under the Sequester.

Expiring of Emergency Unemployment Benefits: Unemployment insurance benefits will expire for two million people on Dec. 29, 2012. See Congressional Budget Office Analysis of Unemployment Insurance.

Medicare Payments to Doctors Reduced: The Medicare "sustainable growth rate" has been using temporary “fixes” to protect doctors from huge automatic reductions in reimbursements. Without the so-called “Doc Fix,” doctors would see a 30% decrease in their reimbursements beginning in January. See Congressional Budget Office Analysis of Approaches to the SGR.

Debt ceiling: The U.S. is expected to reach the maximum amount of outstanding federal debt allowed by law ($16.39 trillion) in early 2013, requiring the ceiling to be raised. The last time this happened, in the Summer 2011, a standoff between the White House and Congress ensued before an agreement was reached, unsettling financial markets and potentially cost the U.S. $1.3 billion in increased borrowing costs. See Government Accountability Office report on increased borrowing costs due to fiscal cliff standoff.

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All Proposals

Align Medicare Part D Drug Payment Policies with Medicaid Policies
Allow Tax Cuts to Expire for Households Making More Than $250,000/year
Cap Federal Tax Deductions at $50,000
End Oil and Gas Tax Preferences
H.R. 8 (112th): The Job Protection and Recession Prevention Act
Impose a Financial Crisis Responsibility Fee
Increase Medicare Premiums for High-Income Beneficiaries
Limit Itemized Deductions and Tax Preferences to 28%
Permanent Tax Relief for Families & Small Businesses Act (Plan B)
Raise the Medicare Eligibility Age
Reduce Post-Acute Care Payments
Reform US international Tax System
Reinstate the 2009 Estate Tax Rate
Reinstate the Superfund Tax
Repeal LIFO Accounting for Inventories
S. 3412 (112th): The Middle Class Tax Cut Act
S. 3521 (112th): The Family and Business Tax Cut Certainty Act
S. 3664: A Bill to Provide for Debt Limit Extensions.
S. 3673 (112th): The Dollar-for-Dollar Act
Tax Carried Interest as Ordinary Income
Use Chained CPI for Cost of Living Adjustments