Paul Ehrsam, market investment director for U.S. Trust in Houston, says the New Year’s Day deal that averted the fiscal cliff amounts to little more than tinkering around the edges of the federal tax code. But he says it is a step in the right direction, and it will help business.
“It didn’t solve all the problems, but it did create some greater transparency for taxes. So now taxpayers for 2013 know what their tax rates are and what to expect going forward. And at the end of 2012, we did not know that, and it created a great deal of uncertainty for business people in particular.”
Under the fiscal cliff deal, income and capital gains tax rates rose for individuals earning over $400,000 a year and couples earning over $450,000. The main effect on middle and lower-income earners was the expiration of a 2% payroll tax holiday, in place for the past two years.