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American Taxpayer Relief Act

Bill NumberHR-8
Public Law Number112-240

Enacted - Signed by the President

Sponsor & Key Contributors
David Camp

Related Issues...
The "Sequester"
Understanding Tax Rates

Major provisions of the bill...

This bill prevented income tax rates from rising for all except those earing more than $400,000 a year. If this bill had not passed, the 2010 extension to the Bush Tax Cuts would have expired - returning everyone to what tax rates were prior to 2001.

For individuals who earn more than $400,000 a year ($450,000 for couples), the bill...
o Raised the marginal tax rate to 39.6 percent. The rate had been 35 percent since 2003.
o Permanently raised capital gains and dividend taxes from 15 percent to 20 percent
o Permanently raised the estate tax rate from 35 percent to 40 percent (for amounts over $5 million)

For individuals who earn less than $400,000 (and couples earning less than $450,000)...
o Made permanent the Bush-era tax cut rates
o Extended Emergency Unemployment Compensation for a year.

The bill also...
o Delayed the automatic across-the-board spending cuts known as the sequester for two months.
o Extended the current farm bill for nine months, averting a hike in milk prices.
o Extended the Earned Income Tax Credit (EITC), child tax credit and college tax credit for five years.
o Permanently indexed the Alternative Minimum Tax for inflation to avoid tax hikes on the middle class.
o Delayed for a year a 27 percent cut in Medicare payments to doctors.

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