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FXstreet.com (Barcelona) - The deal approved by the US Senate means that income tax increases will be avoided for household incomes under $450,000 ($400,00 for those filing separately), with rates rising to 39.6% for incomes above that level (from 35%). This marks a large increase from the $250,000 initially proposed by President Obama. Estate tax exemptions will now be indexed to inflation in 2013 up from the $5.12 million per person limit existing for 2012. The capital gains tax rate will rise to 20% from 15% at a lower threshold than the $450,000 level for higher income tax rates.

Unemployment benefit will be extended by a further 12 months. Payroll taxes are to increase from 4.2% to 6.2%. The latter represents a hit to household incomes of about $95 billion (about 0.6% of GDP) and represents the single largest element of the fiscal tightening that will be seen in 2012-2013 (at least until we know what if any spending cuts will be agreed once the two month moratorium approved in the Senate bill expires).

However, according to the NAB Research Team, "the debt ceiling has not been addressed, but will need to be within 6-8 weeks, by which time the government can no longer pay its way (according to estimates from Treasury secretary Geithner before Christmas) alongside the spending issues left untouched in the Senate version of the bill, known as the 'Taxpayer Relief Act'."

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