The Daily Item, Sunbury, PA

News

December 25, 2012

Your financial cliff Q & A

(Continued)

Q: How will markets react if no agreement is reached by Jan. 1?

A: On Dec. 21, stocks sank around the world after House Republican leaders scrapped Boehner’s plan to allow higher taxes and budget talks stalled. The Standard & Poor’s 500 Index retreated 0.9 percent to 1,430.15 in New York. The Dow Jones Industrial Average slid 120.88 points, or 0.9 percent, to 13,190.84. The benchmark 10-year Treasury note yield dropped three basis points, or 0.03 percentage point, to 1.76 percent at 5 p.m. New York time on Dec. 21, according to Bloomberg Bond Trader data.

Q: What is sequestration and how does it work?

A: Sequestration is the official name for the automatic spending cuts, half of which would be in defense programs. The cuts are across-the-board, giving agency officials little discretion on how to achieve them. Defense programs would face a 9.4 percent cut and most other agencies would be cut by 8.2 percent, the administration said earlier this year.

Q: Is it really a cliff or is it more of a slope?

A: A slope may be a better metaphor. Most of the effects — the higher income tax rates and the spending cuts — would occur gradually during 2013 and not deliver an immediate economic shock. For example, the Treasury Department has at least some authority to freeze paycheck withholding even if higher tax rates are in place. The IRS said Dec. 21 that it will issue guidance to employers by Dec. 31.

Q: Are there some changes that won’t depend on negotiations?

A: Yes. A 3.8 percent increase on income earned from investments, rents and so-called passive activities is set to take effect Jan. 1 as a result of the 2010 health-care law. That means U.S. income tax rates for top earners and investors will go up for the first time since 1993.

Republicans opposed the health-care law and wanted to repeal it if Obama was defeated for re-election. The law also imposes a 0.9 percent additional tax increase on wages next year. Both surtaxes apply to individuals earning more than $200,000 a year or couples earning more than $250,000. An excise tax on medical devices also will take effect.

Text Only
News
  • Fast food workers to escalate wage demands

    Fast food workers say they’re prepared to escalate their campaign for higher wages and union representation, starting with a national convention in suburban Chicago where more than 1,000 workers are expected to discuss the future of the effort that has spread to dozens of cities in less than two years.

    July 25, 2014

  • eyebrows.jpg Coming Sunday: Browsing for brows

    As makeup sales soar, four tips to make your eyebrows raise others'. Coming Sunday

    July 24, 2014 1 Photo

  • 1plane18.jpg Air travel a leap of faith for passengers

    Airline travel requires passengers to make a leap of faith, entrusting their lives to pilots, airlines, air traffic controllers and others who regulate air travel.

    July 25, 2014 1 Photo

  • Honduran president: U.S. has enormous responsibility for crisis

    The historic influx of illegal immigrants from Central America is caused primarily by the high demand for illicit drugs in the United States, Honduran President Juan Orlando Hernandez said Thursday.

    July 25, 2014

  • Today's Editorial: Child's sensibilities shield bad parents

    Periodically, a decree goes forth from the county seat announcing a special on child support, generally in the form of reducing charges and fines for all those able and willing to make good on some payments now past due.

    July 25, 2014

  • Budd fundraising run to pass Geisinger

    MILTON — It’s “kickstands up” tomorrow at 12:30 p.m. from LT’s Tavern on Route 405 in Milton where hundreds of motorcycles will take off on a run to raise funds for the Budds, the Ohio family whose matriarch, Sharon, recovers at Geisinger Medical Center from grave injuries suffered in a rock-throwing incident two weeks ago.

    July 25, 2014

  • Attorneys seek $28G more from Line Mountain in wrestling case

    WILLIAMSPORT — The legal fee issue between the Line Mountain School District and the Beattie family, which successfully sued the district to allow seventh-grader Audriana Beattie to participate on the all-male wrestling team, is not over.

    July 24, 2014

  • Driver to police: 'Just shoot me'

    WATSONTOWN — A Turbotville man has been charged with making terroristic threats and disturbing the peace after he allegedly threatened to shoot people in a bar and said he had a weapon.

    July 24, 2014

  • New panel of officers installed by CSIU directors

    MONTANDON — A new executive team was installed at Wednesday night’s Central Susquehanna Intermediate Unit meeting, as the terms of the present leadership expired this month. Act 102 of 1970, which first created 29 IUs in Pennsylvania, requires  intermediate unit directors to elect board of director officers annually in July.
     

    July 24, 2014

  • Geisinger, Highmark deal moving ahead

    DANVILLE — A five-year extension of the contract between Geisinger Health System and Highmark Inc. won’t be affected by a dispute last year over Highmark allegedly undervaluing Geisinger’s health plan and charging certain plan holders more for care at Geisinger facilities.
     

    July 24, 2014

The Daily Marquee
Video
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.