by Craig R. Smith

11.12.12 - The future of gold will be bright - whether we are pushed off the 2013 fiscal cliff or not.

gold If we tumble off the 2013 fiscal cliff; taxes will go up, spending will be slashed and we will cut the 2013 deficit by $600 billion. BUT we also will face a massive recession, which will likely prompt the Fed to provide liquidity. All of which will push gold prices up higher.

If, on the other hand, we kick the can down the road for months or years, or if Congress arrives at a compromise, then taxes will still go up for those earning $1 million+ a year. This will give businesses a new sense of certainty, which will move the $3.2T in corporate cash and $3T of individual savings now sitting on the sidelines. If $6T is suddenly injected into the economy, it will likely cause price inflation and higher gold prices.

Cliff or no cliff, gold wins.

2013 Tax & Fiscal Cliff Summary

- Obamacare Tax Hikes
Did you know that 20 new or higher taxes on American families and small businesses lie dead ahead? It will be a nightmare in 2013, a disaster in 2014!

- Inheritance Tax Hikes
The estate tax exemption will drop all the way down from $5,120,000 to $1,000,000 and the tax rate is scheduled to jump from 35% to 55%.

Now is the time to review and reassess your tax liabilities coming due in 2013. Swiss America suggests moving a portion of your retirement funds and long- term investments into U.S. gold coins for safety, growth and privacy.

How will the "fiscal cliff" affect your family budget? 2013 Fiscal Cliff Calculator

Related News Stories


Competing proposals: Senate Democrats have proposed to extend all the Bush tax cuts for one year on income up to $200,000 for individuals ($250,000 for married couples).

Democrats would also extend the 2009 expansion of a few tax credits for low-income and middle-income Americans, including the earned income tax credit, the child tax credit and the American Opportunity tax credit.

High-income households would see their top two income tax rates increase to 36% and 39.6%, from 33% and 35% today. Their ability to benefit from certain tax breaks would be limited. And their tax rates on capital gains and dividends would increase to 20% from 15% now.

Senate Republicans, meanwhile, have proposed a full one-year extension of the Bush tax cuts, including the lower rates on investment income. They do not, however, continue the 2009 expansion of the low- and middle-income tax breaks included in the Democratic plan.

Republicans would extend the current estate tax, which allows for a $5 million exemption level and imposes a top rate of 35%.

Both parties would offer protection for the middle class from the Alternative Minimum Tax, although the Democrats' plan only does so for 2012, while Republicans would provide it for both 2012 and 2013.


When the Senate voted last Wednesday to pass controversial legislation extending some of the Bush administration tax cuts, it became clear that estate tax policy will be a focal point of the debate.

The estate tax was left out of the Senate legislation because of disagreement among Senate Democrats about an appropriate rate. Some lawmakers up for re-election this year are nervous about the issue.

Senate Minority Leader Mitch McConnell, R-Ky., said that leaving the estate tax by the wayside threatens small businesses and farms.

“A vote for the Democrat plan is a vote to put these farms and ranches out of business,” he said on the Senate floor last Wednesday.

The other key point about the Democratic tax bill is that it would set capital gains and dividend taxes at 20% for all income levels.

Obamacare law contains 20 new or higher taxes on American families and small businesses


10. Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93

*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens.

11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes:

Current Law 200k
2.9% self-employed

Obamacare Tax Hike 200k+
3.8% self-employed

Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93

12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

13. High Medical Bills Tax ($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389

15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994

16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000

Taxes that take effect in 2014:

17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following

Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337

18. Employer Mandate Tax (Jan 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346

Combined score of individual and employer mandate tax penalty: $65 billion/10 years

19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

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