The House and Senate recently returned to clean up the mess that was left behind in 2012. In large part, this unfinished business is a result of partisan differences, campaigning for re-election and a general lack of urgency. While Congress continues its ways, one major factor in governing cannot be overlooked; the president has no more elections to run and enjoys support to pursue his agenda without fear of the ballot box.
For more than a year, we have been talking about the “fiscal cliff,” where tax rates would rise for all Americans and billions of dollars were scheduled to be pulled from the economy. Passing the December 31 deadline, both sides dug in their heels, wanting either more in tax revenue or more in spending reductions. The final agreement resulted in freezing tax rates for those making under $400,000 ($450,000 for households). Taxes on capital gains and dividends also are set to rise on the same households, up to 20% (23.8% with the Affordable Care Act increases).