Highlights of Budget Deal

THE budget bill passed Saturday aims to cut $490 billion from the federal deficit over five years. Among its key provisions: Income Taxes: A new top tax rate of 31 percent. That would be an increase from 28 percent for about 600,000 highest income Americans and a cut from 33 percent for about 5.3 million upper-middle-income taxpayers.

Other Taxes: A 5-cent-a-gallon federal gasoline tax increase; a two-stage tax increase on cigarettes, liquor, beer, and wine; a 10 percent surtax on expensive cars, boats, planes, and furs.

Deductions: A 3 percent limit on itemized deductions claimed by taxpayers with adjusted gross incomes higher than $100,000.

Exemptions: Gradual elimination of the $2,050 personal exemption for single people who earn more than $100,000 and couples filing jointly who earn more than $150,000.

State and local employees: Extends Social Security taxes to state and local employees without other pensions.

Income tax credit: A five-year expansion of the earned income tax credit for the working poor.

Oil: $2.5 billion in tax benefits for oil and gas drillers and $1.4 billion in tax breaks for small businesses over five years.

Medicare: About $10 billion savings by increasing the deductible and increasing premiums. About $34 billion in savings through reduced reimbursements to doctors and hospitals.

Medicaid: Savings of about $600 million over 5 years through drug discounts and from paying private insurance if it is cheaper, although providing expanded coverage for children, the frail elderly, and the mentally retarded.

You've read  of  free articles. Subscribe to continue.
QR Code to Highlights of Budget Deal
Read this article in
QR Code to Subscription page
Start your subscription today