The Fiscal Cliff Deal and the Damage Done - Businessweek: "If Congress were stacked with 535 centrist macroeconomists, it would have voted to supply more stimulus to the economy immediately while also setting up a mechanism for reducing deficits over the long term. “If stimulus is part of a credible long-term deal, that’s the best of all possible worlds,” says Chris Varvares, co-founder of St. Louis-based Macroeconomic Advisers."
Investor enthusiasm over fiscal cliff deal will be short-lived - The Term Sheet: Fortune's deals blog Term Sheet: " . . . The fiscal cliff, which was essentially created by Congress and the President with the Budget Control Act of 2011, was averted by the exact same Congress and President . . . with the passage of the American Taxpayer Relief Act of 2012. With the stroke of a pen, the nation was pulled back from this politically manufactured precipice with a flawed plan that does little to address the nation's long, or even its short term, fiscal problems. In brief, the compromise ensures that most Americans will pay more in taxes this year than they did in the last two years, with the nation's highest earners, those taxpayers with incomes of more than $400,000 for individuals or $450,000 for married couples filing jointly, taking the brunt of the hit. This relatively ultra-rich group will see their federal tax rates increase from 35% to 39.6% - the rate before the implementation of the Bush-era tax cuts. This group will also pay higher tax rates on investment income, with rates on capital gains and dividends rising from 15% to 20%. This is in addition to the 3.8% "Obamacare" surcharge on investment income scheduled to go into effect today, bringing the top rate on investment income to a sobering 23.8%. . . "
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