- The payroll tax cut is no more. If it had been allowed to continue, Social Security and Medicare would be in even more trouble.
- A 4 percent tax increase on people making over $400K a year isn’t the end of the world, given that Democrats control the White House and the Senate.
- Democrats now support the vast majority of the “Bush tax cuts.”
- The spending cuts (“sequestration”) were put off for just two months. When discussing those, Republicans will have more leverage than Democrats.
- Also, next will be the debt ceiling discussion, where Republicans will have all the leverage.
Of course, none of this changes the fact that, in the long run – or even the medium run – we’re doomed. But still…
Happy New Year!
- The new tax rates are finally permanent! No wrangling every few years.
- Dividends will be permanently taxed at a maximum rate of 20 percent. Before the Bush tax cuts, they were taxed as ordinary income (39.6 percent)
- The AMT patch is finally permanent!
- Estate taxes only kick in after $5 million. And they’re capped at 40 percent after that.