Running Up that Hill and Over the Cliff

Running Up that Hill and Over the Cliff

It seems as if that famed Kate Bush song is the perfect soundtrack to this “fiscal cliff” debate we’ve been hearing about. And finally, on New Year’s Day, the US senate passed a bill that aims to avert catastrophe. The bill will see higher marginal tax rates (39.6% on income over $450,000 (couples) and $400,000 (singles)) on the wealthiest 2% of Americans and the maintenance of current tax rates on the remaining 98%.

Although it is far from the “grand bargain” that is hoped for by President Obama, the piecemeal victory is nevertheless significant to “98% of Americans and 97% of small businesses who will not see their income taxes go up.”

According to Tax Professor, the bill also includes the following:

  • Raise the tax rate on dividends and long term capital gains to 20% on...
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