Senate Republicans are united behind a bill to extend the Bush tax cuts, permanently patch the Alternative Minimum Tax, and reform the estate tax on inherited assets. The Congressional Budget Office has projected that the law will deprive the U.S. government of nearly $4 trillion over the next decade, the Washington Post reports. That is about 20 percent more than the White House's plan to extend tax cuts only to the bottom 98 percent of taxpayers.
The following summary of the bill comes straight from Sen. Mitch McConnell's office. All underlined portions differ from the Senate Democrats' proposal. Those differences are explained below.
The Tax Hike Prevention Act maintains current law on income tax rates. It preserves the 10, 15, 25, 28, 33, and 35 percent income tax brackets - rather than allowing the President to achieve his goal of a maximum official tax-rate bracket of 39.6 percent. 
The Tax Hike Prevention Act prevents the return of the marriage penalty tax. Married couples shouldn't be subject to higher taxes simply because they are married. Unfortunately, the income tax laws have penalized marriage in a number of ways over the years. The 2001 tax relief reduced this marriage penalty, and The Tax Hike Prevention Act continues that relief. ·
The Tax Hike Prevention Act continues the child tax credit. The bill would continue the progressive child tax credit at $1000 per child, rather than letting it fall to $500 per child. ·
The Tax Hike Prevention Act protects 22 million Americans from the individual Alternative Minimum Tax (AMT). The AMT is a sneak-attack tax that especially taxes families with children, as well as taxpayers in high-tax states. The Tax Hike Prevention Act will significantly increase the AMT exemption amount, protecting 22 million Americans in 2010 - and beyond.
The Tax Hike Prevention Act preserves current rates on capital gains and dividends. Democrats in Congress are dangerously close to allowing the tax on dividends to more than double starting in 2011 - from the current 15 percent, to a maximum rate of 39.6 percent. They also want capital gains to be taxed at a maximum of 20 percent, instead of the current 15 percent. 
The Tax Hike Prevention Act reforms the death tax. The death tax reform section is comprised of the bipartisan Lincoln-Kyl tax reform proposal. It provides for a 35 percent death tax rate; a unified exemption amount of $5 million (per individual), indexed for inflation and a stepped-up basis for inherited assets.
 In the Democrats' plan, families making more than $250,000 will see their top income tax bracket rise to 1999 levels, by 3-4 percentage points. In the Republicans' plan, there is no tax increase.
 In the Democrats' plan, families making more than $250,000 will see their capital gains and dividend tax rates raise to 1999 levels. Taxes on capital gains (like the money made from mutual funds) would rise 5 percentage points, and dividend income (the portion of corporate profits you get back as a stockholder) would be treated as normal income, which is why the top rate would rise to 39.6 percent, the highest income tax bracket.
 In the Democrats' plan, the estate tax reverts to 2009 law. Family members inheriting assets will pay up to 45 percent of every dollar after $3.5 million. In the Republican plan, the "Lincoln-Kyl reform" lowers the rate to 35 percent and raises the ceiling to $4.5 million. This reform would deprive the Treasury of about $60 billion over 10 years. If no law is passed, the estate comes back with a vengeance, taking more than half of each dollar above $1 million.
Finally, both bills "patch" the Alternative Minimum Tax. This annual headache for taxpayers and electeds alike would otherwise raise taxes on upper-middle/lower-upper families. I'm putting in some calls to get clarity on how the plans differ on the AMT.
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