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
[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
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
With over 720 million Internet users and 40–50% CAGR, the Chinese Cloud Computing market has been booming. When talking about cloud computing, what are the Chinese users of cloud thinking about? What is the most powerful force that can push them to make the buying decision? How to tap into them? In his session at 18th Cloud Expo, Yu Hao, CEO and co-founder of SpeedyCloud, answered these questions and discussed the results of SpeedyCloud’s survey.
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
StarNet Communications Corp has announced the addition of three Secure Remote Desktop modules to its flagship X-Win32 PC X server. The new modules enable X-Win32 to safely tunnel the remote desktops from Linux and Unix servers to the user’s PC over encrypted SSH. Traditionally, users of PC X servers deploy the XDMCP protocol to display remote desktop environments such as the Gnome and KDE desktops on Linux servers and the CDE environment on Solaris Unix machines. XDMCP is used primarily on comp...