Begich Applauds Last-Minute Deal, Tax Relief for Millions
In the early hours of 2013 in Washington, D.C., Sen. Mark Begich joined with colleagues of both parties in the Senate in approving a package that would extend tax relief to middle-class Alaskans and most businesses. The budget deal also rejects a pay increase scheduled to take effect in 2013 for members of Congress.
“Alaskans can breathe a sigh of relief tonight knowing that most will not see the giant tax increases they were facing as a result of Congress’ inaction,” Begich said. “This deal – while not perfect – at least gives families and businesses the certainty they need to make spending plans and budgets for the new year.”
Negotiators in the Senate worked throughout the day Monday to hammer out the deal.
The shape of the current deal includes the following provisions:
- Marginal income tax rates will rise to 39.6 percent on individuals with income of $400,000 or more per year and on households making $450,000 or more;
- An adjustment to Medicare reimbursement rates that will maintain reimbursement rates for physicians;
- A permanent fix to the Alternative Minimum Tax that adjusts it for inflation and keeps it from impacting some 30 million American households with incomes greater than $65,000 per year;
- An agreement on the estate tax would set the rate on inherited assets at 40 percent, and exempts the first $5 million of an inherited estate for a single person and $10 million for married couples;
- An extension of unemployment benefits for one year;
- Extend 2009 stimulus provisions including the earned income tax credit, child tax credit and college tax credit for five years;
- And an increase to the tax rate on dividends and capital gains for families making more than $450,000 from 15 percent to 20 percent.
Begich also secured a provision in the deal of particular interest to Alaska Native corporations. Section 646 of the tax code is permanently extended in the deal. The extension allows Alaska Native Settlement Trusts to maximize the subsistence, educational and other benefits they provide to Alaska Natives and its permanent extension was a priority of the Alaska Federation of Natives.
The Senate approved the deal with 89 votes, well above the 60 needed for it to pass, early Tuesday morning. The House is to debate the package beginning New Year’s Day. Any and all of the current provisions could be amended or rejected, so the final shape of the deal is far from certain.
“Progress is underway, although at a ridiculously slow pace,” Begich said. “It’s good to see movement of any kind, but it shouldn’t have taken this long and I wish I could tell Alaskans we’re farther along than we are.”
Begich also said he would have preferred the deal address more on the spending side of the equation. Spending cuts are not part of the current deal, but Begich believes there’s a great deal of room for more cuts, including programs like the $400-million Medium Extended Air Defense System, which Begich pushed to eliminate from the recently passed National Defense Authorization Act; elimination of funding for the Peace Institute, a Washington, D.C. think tank; and selling off excess property owned by the federal government that isn’t being used and could be developed by the private sector to raise local property tax revenues.
Posted: January 2, 2013