WASHINGTON (Reuters) - An emerging deal to avoid the U.S. “fiscal cliff” would raise $600 billion in revenue over the next 10 years by increasing tax rates for individuals making more than $400,000 and households making above $450,000 annually, according to a source familiar with the talks.
The deal would also delay a series of automatic government spending cuts, known as the “sequester,” though a sticking point remains on how long that delay would last.
The White House is pressing for it to be delayed a full fiscal year and to include offsets made up of a mix of spending cuts and revenue, the source said.
The deal would permanently extend middle-class tax cuts for 114 million households and includes a permanent fix for the so-called “alternative minimum tax.” It would extend unemployment insurance for 2 million people for one year.
The deal would raise the estate tax for estates worth $10 million per couple or more to 40 percent from 35 percent.
The agreement would return capital gains tax rates for individuals making $400,000 a year and couples making $450,000 a year to what they were under President Bill Clinton. Including a 3.8 percent tax from Obama’s 2010 healthcare law, dividends and capital gains would be taxed at a rate of 23.8 percent.
The deal also prevents a 27 percent cut to reimbursements for doctors who see Medicare patients, known as the “doc fix,” and does not include cuts from Obama’s healthcare law to do so, according to the source.
Reporting by Jeff Mason, Roberta Rampton, and Mark Felsenthal; Editing by Will Dunham