Obama Avoids The Fiscal Cliff, But wait theres a catch! 

The budget deal passed by Congress Jan. 1 and signed into law by President Barack Obama the following day raises taxes on the income and investments of fewer high earners than Democrats proposed.

              Still, families earning $250,000 to $450,000 a year, who are now breathing a sigh of relief, might have more of a tax pinch in 2013 than they anticipate. And those earning more than $450,000 a year may be better off than they expect.
The deal struck by Congress Jan. 1 averts most of the $600 billion in tax increases and spending cuts that were set to take effect this month. It includes a new top income tax bracket with a 39.6 percent rate, which applies to annual taxable income above $400,000 for individuals and $450,000 for married couples. Obama had campaigned since 2007 to set the levels at $200,000 and $250,000, instead. So in essence what has happened is Mr. Obama as given in to the demands of the rich to tax them more.

Lets look at a few examples of what the bill has done :

• Democrats had proposed the lower thresholds as a marker for higher rates on capital gains and dividends. Instead, the law raises the rate to 20 percent from 15 percent, also for taxable income above $400,000 for individuals and $450,000 for couples. That means four tax brackets effectively exist for long-term capital gains and dividends this year: the existing zero and 15 percent, 18.8 percent and a top 23.8 percent. Fair enough, in a democracy it is somewhat the burden of the rich to provide for the poor.  But there are always ways to circumvent such provisions.

• The budget deal also didn’t extend a two-percentage point cut in the payroll tax for workers of all income levels that expired Dec. 31,great aint it? Millionaires also saw relief with taxes paid on gifts and on estates at death compared with Obama’s past proposals. The law makes permanent a $5.12 million exemption, or $10.24 million for married couples, on lifetime gifts and estates. It also indexes those levels for inflation so they will increase over time,wow its like the rich would wait for the time when a $2Mn "GIFT" would give them most returns and then hit the button. For those confused as to how this will benefit them, it would be through the fake trusts they make.