From Streettalk Off The Street January 21, 2013 - 11:02am
Hoisington Investment Management
January 21, 2013
By: Lacy Hunt, Ph.D.
Quarterly Review and Outlook, Fourth Quarter 2012
Tax Consequences: From Gain to Drain
The American Taxpayer Relief Act has lifted the immediate uncertainty of the fiscal cliff. Nevertheless, tax increases that are already in effect from this act, as well as the Affordable Care Act, impose a major obstacle to growth for the U.S. economy in the first half of 2013. The result of these taxes is considerable, especially in light of the poor trend in household income. In addition, these tax increases will continue to act as a drag on economic growth until late in 2015 and are unlikely to produce the revenue gains advertised.
Based on static scoring, the initial direct impact of the federal tax changes totaled approximately $250 billion for 2013. The return of the FICA tax rate to 6.2% is the largest component ($127 billio...
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