Republicans propose tax bill to deal with fiscal cliff

The Republican Party has taken action to move fiscal cliff negotiations forward by proposing a tax bill that will extend low tax rates in a bid to cushion some of the impact of the basket of tax hikes and government spending cuts due to hit the world's largest economy on January 1st 2013.

Reuters reports that nobody expects the bill – which would except incomes of $1 million (£613,000) or more – to get through the Democratic-dominated Senate.

President Barack Obama's most recent position on the fiscal cliff puts the threshold for income tax hikes at $400,000.

So far, both sides have been at loggerheads in negotiating a way to lessen the impact of these financial events, but little progress has been made and therefore the main aim of this proposal from the Grand Old Party may be just to put the pressure on Mr Obama.

It is unlikely policymakers will reach an agreement before Christmas, with many economists anticipating they will only reach a resolve at the last minute.

Wall Street was subdued at open today and at 15:40 GMT, the Dow Jones Industrial Average slipped by 0.1 per cent to an index value of 13325.5. points.

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