Legislative update - JCT estimates of Speaker Boehner’s “Plan B” 

The House is expected to vote on at least one of them December 20.

Revenue estimates of versions of “Plan B”

The bill, referred to as “Plan B,” represents the effort by Speaker John Boehner (R-OH) to produce an alternative to proposals the White House has released during negotiations to avert the “fiscal cliff” on January 1, when all the provisions of the 2001 and 2003 tax acts have expired.

• Under one version, select provisions of the two acts would be extended one year, at a 10-year cost of $251 billion.
• Under the other, the same provisions would be extended permanently, at a cost of $4.14 trillion.

The estimates for the one-year extension are contained in JCX- 77-12 [PDF 14 KB]. The estimates for the permanent extension are contained in JCX-78-12 [PDF 24 KB].

Provisions

Speaker Boehner has said the House would vote on the permanent version of the bill. Included are provisions that would:

• Retain current-policy tax brackets for individuals with taxable income of less than $1 million ($500,000 for married filing separately), meaning that for taxpayers over those thresholds, the tax rate will revert to 39.6%
• Repeal the 2001 act sunsets affecting:
• Personal exemption phaseout and itemized deduction limitation (PEP and Pease)
• Child and family provisions
• Continue the current estate, gift, and generation-skipping transfer tax rules: 35% maximum rate, with a $5 million exemption amount.
• Continue the maximum 15% tax rate on capital gains and dividends, but enact a 20% maximum rate if the income would otherwise be taxed at the 39.6% rate (for taxable income of $1 million or more)
• Increase the section 179 expensing amounts and threshold limits ($250,000 / $800,000); under the permanent version of Plan B, both would be indexed for inflation
• increase the alternative minimum tax exemption amounts to $78,750 / $50,600 (joint/single filers) and AMT relief for nonrefundable credits; under the permanent version of Plan B, the AMT would be indexed for inflation