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View Diary: President Obama speaks to nation about fiscal cliff saying a deal is within sight - full transcript (41 comments)

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  •  Probably reinstatement of "Pease limitations." (4+ / 0-)
    Recommended by:
    elwior, glynis, HappyinNM, smartdemmg

    So it would be haircut on the total of itemized deductions to the tune of 3% of AGI or something. ie, if my AGI is $250,100, I reduce my itemized deductions by 3% of the excess over $250K, or $3.  That's small potatoes on amounts just over the threshold, but it grows rapidly as AGI increases.

    •  yes, this is what it means (2+ / 0-)
      Recommended by:
      johnny wurster, smartdemmg

      according to what Ezra Klein has tweeted/written.

      •  Makes sense. (1+ / 0-)
        Recommended by:

        So, assuming a 3% AGI haircut (IIRC, the old Pease haircut), the effective marginal rate on income over $400K would be about 40.7%: 39.6% + 1.1% due to reductions in deductions.  And then the rate would be 44.5% for things like interest income, fX gains, and nonqualified dividends due to imposition of the medicare surtax.

        Well, that'd be the rate for taxpayers in FL, TX, and other states w/ no state income tax, anyways.

        (I don't remember if Pease limitations had any carve-outs for charitable contributions or investment interest expense or anything.  I don't think so, but I could be wrong.  And I'm too lazy to look it up to confirm)

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