Congress Passes 'Tax Relief Extension Act', President Obama's Statement (Video) - Update

Markets in Asia are reacting positively to the fiscal cliff vote. The Hong Kong Hang Seng Index is up 2.14% to 23,143. USD/JPY is at 87.265. We'll see if the S&P spikes on the news tomorrow. After raising tax rates on those making $400,000+, Congress still has to deal with the debt ceiling and government spending cuts in two months (March 1, 2012). So "risk assets" will be pricing in the risk of further tightening ahead since the economy is directly affected by fiscal policy (with help from monetary stimulus). Watch President Obama's statement after the jump. Here's more info on the "Tax Relief Extension Act" via c-span.org.

"By a vote of 257-167 the House has passed HR 8, the Tax Relief Extension Act, which the Senate passed early Tuesday morning by a vote of 89 to 8."

"The legislation keeps the Bush era tax cuts for individuals making less than $400,000 and couples making less that $450,000. It also makes permanent the fixes for the Alternative Minimum Tax and delays government spending cuts for two months."

But tax hikes didn't end there.
Payroll taxes also rose on January 1, 2013. According to CNN Money,

"Workers earning the national average salary of $41,000 will receive $32 less on every biweekly paycheck. The higher the salary (up to $113,700), the bigger the bite, but business owners say their lower wage employees will feel it most."


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