If you’ve been paying any attention to the media over the past few weeks, you’ve heard about the looming Fiscal Cliff that threatened to push the fragile U.S. economy back in to recession.
As a New Year’s gift to the U.S. people, Congress decided to pass a bill averting this cliff. It’s commendable that Republicans and Democrats could overcome their petty differences to pass a bill that actually makes sense.
My biggest annoyance with all this talk about the 1% paying their “fair” share in taxes, was that Democrats proposed couples with $250,000 in annual income pay higher taxes. In states like California and New York, $250,000 certainly doesn’t make you wealthy, and it definitely is no where close to the top 1% of earners in those states.
So I’m happy to see that they’ve raised the taxes only for couple with incomes over $450,000 – much more reasonable than the $250,000 originally proposed by President Obama.
Another good measure was the $5 million exemption on estates inherited from individuals, and $10 million from families, although the tax rate did increase slightly to 40%. Still it’s better than the original “cliff” version of 55% on estates over $1 million, and Obama’s version of 45% on estates over $3.5 million.
In another post, I’ll go over all the changes in more detail.