San Diego Housing Market News and Analysis
Fiscal Cliff Primer....
User Forum Topic
Submitted by flu on November 8, 2012 - 8:54pm
...So if you're wondering what is such a big deal about the fiscal cliff, this primer actually isn't a bad start....(And this is a condensed version of what I've seen)
Highlighted bold items are the ones concerning income/investments for the lazy...
Now, as some have mentioned, each small tax change is "just incrementally small"..Well it is....By itself... But look at all the nickel and dime items that are cropping up...Added up, it's not so small.....
Yes, everyone is gonna pay higher taxes.....Whether they are in denial or not....
Morale of the story.. If you were planning to realize gains in after tax investments, this year is probably gonna be a much better year than others years that follows...which is why I think you'll have a selloff all for the remainder of the year...Although it is unlikely everything will expire, a lot of it will...
Happy new year!
What's in the fiscal cliff?
NEW YORK (CNNMoney) -- The fiscal cliff is a man-made disaster waiting to happen.
*Automatic spending cuts
Since Congress failed last year to reach a bipartisan debt-reduction deal, the Budget Control Act requires automatic spending cuts to commence on Jan. 2 that will amount to $1.2 trillion in deficit reduction over 10 years.
*Defense: $55 billion will be cut in 2013 from projected levels of discretionary defense spending. That translates into at least a 10% cut to every program, project and activity that's not explicitly exempt.
*Nondefense: $55 billion will be cut from projected levels of nondefense spending, which includes things like education, food inspections and air travel safety. Budget experts estimate the cuts will result in at least an 8% cut to programs, projects and activities.
*Bush tax cuts
*Income tax rates: Rise to 15%, 28%, 31%, 36% and 39.6%, up from 10%, 15%, 25%, 28%, 33% and 35%.
*Capital gains rate: Rises to 20% from 15% for most filers.
*Child tax credit: Falls to $500 per child from $1,000. The refundable portion also reduced.
*American Opportunity Tax Credit: Expires. The lesser value HOPE tax credit for college tuition is reinstated. Several smaller education tax benefits also expire.
*Earned Income Tax Credit: Expansion of eligibility for the credit expires.
*Marriage penalty relief: Expires. Effectively that means a low- or middle-income two-earner couple will owe more to the IRS than they would if they were single making the same income.
* Unemployment benefits extension
* Tax extenders
Some budget experts count as part of the fiscal cliff the onset of a new Medicare surtax on high-income households under health reform.
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