How to avoid the cliff
No resolution on the revenue side of the fiscal cliff will make everyone happy. However, one proposal is simple, doesn't raise income tax rates and puts the burden on those who have benefited most over the past few decades. Keep all the current tax rates and deductions as they are with only these two changes:
1. Cap the maximum total deduction at $50,000.
2. Consider the difference between the earned income tax rate and the current rate on dividends, capital gains and "carried interest" as part of the maximum total deduction. After that $50,00 threshold is reached, the latter are taxed at the higher income tax rate.
It's not a perfect solution, but it addresses the biggest concerns of both parties.
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