Click here to close now.




















Welcome!

News Feed Item

Fiscal Cliff Averted, Confrontation Postponed-BMO Private Bank Looks Ahead

- High-income earners will be most affected by tax hikes

TORONTO, ONTARIO and CHICAGO, ILLINOIS -- (Marketwire) -- 01/04/13 -- Investors breathed a sigh of relief on New Year's Day with the passage of the hastily-negotiated package that the U.S. would not fall off the Fiscal Cliff, and BMO Private Bank expects interest rates to remain stable until lawmakers get back to the table next month.

The anticipated Fiscal Cliff consisted of $600 billion USD in automatic spending cuts and tax increases that were set to go into effect in early 2013. Without this agreement, they likely would have had a negative impact on U.S. economic growth and a ripple effect around the world.

"The House approval of the Senate bill was a big win for President Obama, who pledged to raise taxes on higher income earners," said Jack Ablin, Chief Investment Officer, BMO Private Bank. "Surprisingly, there were virtually no spending cuts included in the compromise."

Mr. Ablin noted that the most difficult decisions will take place in late February, including the sequestering of automatic spending cuts amounting to more than $100 billion USD per year. He also said that the return of the debt ceiling debate would dominate news headlines in the coming weeks.

The last-minute negotiations this week resulted in the following:


--  Individuals making more than $400,000 or couples earning more than
    $450,000 USD (0.7 per cent of U.S. households) will see the top marginal
    income tax rate rise to 39.6 per cent in 2013, up from 35 per cent last
    year 
--  Tax rates for income earned below those thresholds have been extended 
--  Investment-related tax rates increased 
--  Taxes on long-term capital gains and dividends increased to 20 per cent
    from 15 per cent on high income households 
--  Taking the new 3.8 per cent Affordable Care Act tax into account, the
    new effective rate rises to 23.8 per cent for those filers 
--  Congress extended the $5-million estate tax exemption, raising the tax
    rate from 35 per cent to 40 per cent 

In addition, Congress allowed Federal Insurance Contributions Act (FICA) taxes to rise by two percentage points for all Americans. BMO estimates that the payroll tax will take roughly two per cent out of consumer spending in the first quarter of 2013.

"Investors may be celebrating, but the bond market isn't too happy," said Mr. Ablin. "As it stands now, the deal sets the stage for roughly $3.6 trillion of additional deficits over the next 10 years. The 30 year treasury yield just broke above three per cent, its highest level in months. While we do not expect a dramatic rise in interest rates, in-action by Washington could be a cause for concern for bond holders."

About BMO Private Bank, a Part of BMO Financial Group:

BMO Private Bank offers a comprehensive range of wealth management services that include investment advisory, trust, banking and financial planning to meet the financial needs of high net worth clients. Through integrated teams of experienced financial professionals, BMO Private Bank helps its clients realize their financial and lifestyle goals with solutions that are custom tailored and delivered with the highest level of personalized service.

BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC.

Contacts:
Media Contacts:
Patrick O'Herlihy, Chicago
(312) 461-6970
Patrick.O'[email protected]

Rachael McKay, Toronto
(416) 867-3996
[email protected]

Valerie Doucet, Montreal
(514) 877-8224
[email protected]

Laurie Grant, Vancouver
(604) 665-7596
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
"We've just seen a huge influx of new partners coming into our ecosystem, and partners building unique offerings on top of our API set," explained Seth Bostock, Chief Executive Officer at IndependenceIT, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Learn how you can use the CoSN SEND II Decision Tree for Education Technology to make sure that your K–12 technology initiatives create a more engaging learning experience that empowers students, teachers, and administrators alike.
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, provided some practical insights on what, how and why when implementing "software-defined" in the datacent...
As organizations shift towards IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection and E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his session at 17th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Partnerships at Com...
SYS-CON Events announced today that VividCortex, the monitoring solution for the modern data system, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. The database is the heart of most applications, but it’s also the part that’s hardest to scale, monitor, and optimize even as it’s growing 50% year over year. VividCortex is the first unified suite of database monitoring tools specifically desi...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...