Updated Friday, October 31, 2014 as of 4:00 PM ET

Budget Talks Making Progress on Tax Increase as Deadline Looms

Negotiators made progress overnight as they tried to reach a last-minute U.S. budget deal that would let income taxes go up on some top earners.

With taxes set to increase for almost every U.S. worker at midnight, there is still no agreement yet and gaps between the two parties remain, according to people familiar with the talks who requested anonymity. Republicans and Democrats were narrowing the threshold for tax increases to between $400,000 and $500,000 in annual income.

My sense is progress is being made, Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, told Bloomberg Television. Its not a done deal. I think its a little better than 50% that were going to be able to avoid going over the fiscal cliff by midnight tonight.

Talks between Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell stalled yesterday because of disputes over income tax rates, the estate tax and other issues. McConnell reached out to Vice President Joe Biden in an effort to break the impasse, while staffers worked into the night trading and reviewing offers. The two made progress, according to a person familiar with the negotiations.

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