Lucky Number 2013
Stocks are rallying after Law Makers agree to a deal averting the fiscal cliff of $600 billion in spending cuts and tax increases. Pundits at large have indicated that without congressional action the cliff’s financial burden would drag the economy back into recession. In other words, if the economy shrinks – job losses accelerate, housing prices retreat, risk assets become more volatile and our country’s debt burdens escalate (shrinkage is obviously not a good thing).
Now that that’s off the table – here are highlights of the approved Bill by the House and Senate Tuesday.
• Income Tax Rates – income over $400k for individuals and $450k for couples will be taxed at 39.6%
• Estate Tax – raised to a top rate of 40% with exemptions of $5m for individual and $10m for family estates
• Alternative Minimum Tax – indexed to inflation preventing millions of middle class taxpayers from being hit
• Payroll Tax – social security tax increased to 6.2%
• Jobless Benefits – extended to one year
So there we have it, off to a brand new year in less than a minute.