There are several competing plans to avoid the "fiscal cliff," a one-two combination of tax increases and automatic spending cuts. The GOP-controlled House is scheduled to vote Thursday on House Speaker John Boehner's scaled-back "plan B" tax proposal exempting people earning less than $1 million a year from tax increases. Boehner and President Barack Obama have also exchanged offers in their ongoing talks.
Highlights of the three competing plans include:
—Obama would increase taxes by $1.3 trillion over a decade, including raising the top rate on income exceeding $400,000 from 35 percent to 39.6 percent. He also would increase the tax rate on capital gains and dividend income exceeding $250,000 from 15 percent to 20 percent and increase the estate tax rate from 35 percent to 45 percent, while exempting estates of $3.5 million per person. He would limit the deductions claimed by wealthier people. Tax brackets would be indexed for inflation less rapidly.
—Boehner's latest offer totals $1 trillion over 10 years, including raising the top rate on income exceeding $1 million to 39.6 percent and increasing rates on dividends and capital gains. Boehner also proposes a tax overhaul next year that would lower rates and eliminate numerous deductions, credits and other tax breaks.
—Plan B would increase taxes by about $310 billion by raising the top tax rate to 39.6 percent on million-dollar-plus incomes. It also would increase the tax rate on capital gains and dividend income exceeding $1 million from 15 percent to 20 percent and maintain the estate tax rate at 35 percent, while exempting estates of $5.1 million per person. It would permanently update the alternative minimum tax for inflation.
—Obama proposes to cut spending by $1.2 trillion over a decade, though that includes $290 billion in interest savings not counted under GOP math. He proposes cutting $400 billion from health care programs and $200 billion in cuts and fees from other so-called mandatory spending. He proposes $200 billion in cuts from agency budgets set by Congress each year, half from the Pentagon and half from non-defense. He claims $130 billion from a lower inflation adjustment that reduces Social Security and federal retirement benefits.
—Boehner's original offer promised $1.4 trillion in spending cuts over a decade, including $600 billion from health care programs, $300 billion from non-health mandatory programs, $200 billion from the lower inflation adjustment and $300 billion from agency budgets. Last week, he winnowed the savings to as low as $1 trillion, with about half to come from health care programs.
—Plan B includes no spending cuts.
—Obama would raise the government's borrowing cap enough to last for two years.
—Boehner's offer would raise the debt limit enough to last 1 year.
—Plan B would not increase the debt limit.