The Next Big Challenge Is The Debt Ceiling!

The deal is not perfect. Cost savings should come from the troop draw-downs in Iraq and Afghanistan as long as no new wars are planned. The economy is picking up slowly. More college grads will be hired this year. That means more tax revenues (which is how the revenue streams are supposed to work). The most serious cost savings could come from migrating Medicaid to the States for administration. Additional revenues are to be gotten from taxing things like junk food. As you are aware, pot has been legalized in Washington State and huge revenue dividends are expected from the State. I expect that the federal government will follow suit with pot taxes of its own in due course. Some adjustments are going to happen in the itemized deductions area hitting the higher incomes with less generous allowable deductions for things like mortgage interest and charitable deductions. We need to spend money on infrastructure. Much of what is out there is '70s infrastructure when the USA population was 200 million. The population is now 315MM and growing so we'll need better infrastructure for sure. An upgraded infrastructure should help us with economic growth.

With regard to capital gains, we'll have to see how the changes are implemented in the various income categories. I think that the average middle class may be minimally impacted except of course for the increases in the payroll tax. I do favor excess consumption taxes on things like junk food.