Photograph by Andrew Harrer/Bloomberg

A deckhand washes a yacht that is docked in the Sag Harbor Bay in Sag Harbor, New York.

That’s how much more the top 0.1 percent of taxpayers, on average, will pay in taxes under the budget deal, according to the nonpartisan Tax Policy Center.

Folks with incomes over about $2.7 million would see their after-tax incomes reduced by 8.4 percent. They would pay 26 percent of the additional taxes imposed by the legislation.

Mostly because of the expiration of the payroll tax cut, which was enacted during the economic slowdown and is being allowed to expire, taxes will go up on 77 percent of American households under the plan.

Richard Rubin contributed.

Original post is Bloomberg by the Numbers: $443,910 by Political Capital.

Photograph by Brendan Hoffman/Pool via Bloomberg

President Barack Obama and Vice President Joseph Biden depart after speaking in the Brady Press Briefing Room at the White House in Washington on Jan. 1, 2013.

“Simply put, they remember a day when politicians compromised.”

That’s Jared Bernstein, the vice president’s former chief economist, talking about Joe Biden and his dance partner on the fiscal cliff deal, Senate Republican Leader Mitch McConnell.

Bloomberg’s Margaret Talev and Roger Runningen report that McConnell decided it was time to deal directly with the White House two days ago, though not with President Barack Obama. With $600 billion in tax increases and spending cuts about to take place, McConnell saw Biden as a good-faith negotiator.

Yesterday they reached a deal and passed it through the Senate, 89-8.

To read Talev’s story, click here.

Original post is Biden-McConnell: Remembering Compromise by Political Capital.

Photograph by Sam Hodgson/Bloomberg

Workers build a house in Rancho Santa Fe, California.

That’s how much economists predict the U.S. GDP will expand in 2013, according to the median of 86 projections compiled by Bloomberg.

Growth will slow down from 2.2 percent in 2012, as the federal government seeks to rein in its budget deficit through spending cuts and tax increases. Even if the impact of the so-called fiscal cliff is ultimately blunted, Congress already has agreed on discretionary spending reductions that may curb economic growth somewhat.

With assistance from Rich Miller.

Original post is Bloomberg by the Numbers: 2% by Political Capital.

The year-end deadline is here for Congress and the president to find some way to avert more than $600 billion in spending cuts and tax increases that make up the so-called fiscal cliff. Investors have become more and more concerned as the days slipped away that progress was coming too slow for a deal to be reached in time.

Original post is Bloomberg by the Numbers: 27.72 by Political Capital.

The list from Illinois Senator Dick Durbin, the second-ranking Democrat, begs the question: what’s NOT the sticking point?

Here is Durbin’s list of unresolved issues: the income threshold at which tax rates would rise, expiring estate tax levels and how to prevent an expansion of the alternative-minimum tax. Durbin also said there is a debate over raising the rate for capital gains and dividends from 15 percent to 20 percent.

There is just over a day left before more than $600 billion in tax increases and spending cuts are set to go in effect. Senators have spent the weekend passing offers back and forth to try and avert the so-called fiscal cliff.
As of now, the issues that divide them still look deep.

Original post is Durbin: Long List of Sticking Points by Political Capital.

The AMT, a parallel tax structure originally designed to prevent high-income households from legally escaping the income tax, will affect only about 4 million households in tax year 2012 if lawmakers can pass a fix. Those folks would pay even more without a solution.

Even the pared-down proposals for solving only the “must-do-now” pieces of the so-called fiscal cliff include an AMT patch.

Yet, if lawmakers fail to act even on the pared-down plans, the AMT would raise taxes on much of the middle class in the returns they’ll file in early 2013. The AMT tends to affect residents of high-tax states because it prevents taxpayers from deducting state and local taxes. For instance, without the patch, about half of New Jersey households would pay taxes under the AMT for 2012.

Richard Rubin contributed.

Original post is Bloomberg by the Numbers: 28 Mln by Political Capital.

Photograph by Sasha Weleber/Getty Images

Congress is coming back today, looking to find a solution to avoid more than $600 billion in tax increases and spending cuts that start Jan. 1, 2013.

That’s the average annual yield on the benchmark 10-year Treasuries, and it’s the lowest average on record.

Congress is coming back today, looking to find a solution to avoid more than $600 billion in tax increases and spending cuts that start Jan. 1, the so-called fiscal cliff. The American public and the financial markets are growing less confident that lawmakers will manage to pull something off before the deadline, with fewer people telling Gallup pollsters they expect a deal and stocks moving lower for three straight days.

And that concern is pushing the yields on Treasuries down. The 10-year yield compares with the average of 3.66 percent for the past decade.

“We’re coming to the edge of the cliff, and time is running out,” Larry Milstein, managing director of government-debt trading at R.W. Pressprich & Co., told Bloomberg News.

With assistance from Daniel Kruger and John Detrixhe

Original post is Bloomberg by the Numbers: 1.79% by Political Capital.

Photograph by Victor J. Blue/Bloomberg

Not as many shopping bags as expected, per the past year's holiday spending.

That’s how much U.S. holiday sales rose this year — less than half the pace of a year ago when purchases went up 2 percent, according to MasterCard Advisors SpendingPulse.

Pundits called it “Cliffmas” this year and it seems that they were right. The mood of the American consumer soured while Washington politicians argued over the best way to avert more than $600 billion in higher taxes and spending cuts that will begin on Jan. 1, the so-called fiscal cliff. Superstorm Sandy also hurt, and consumer confidence fell in December to a five-month low.

With less than a week to go, there is still no fiscal deal.

Original post is Bloomberg by the Numbers: 0.7% by Political Capital.

Photograph by Andrew Harrer/Bloomberg

Ben S. Bernanke, chairman of the U.S. Federal Reserve.

Record-low mortgage rates aren’t cheap enough for Federal Reserve Chairman Ben S. Bernanke.

Bloomberg reports that the Fed is buying $45 billion of Treasuries and $40 billion of mortgage-backed securities each month and central bankers are disappointed that their third round of quantitative easing hasn’t led to more savings for consumers on home loans.

Bernanke this month called the trend “unfortunate,” and the Federal Reserve Bank of New York held a workshop to examine the issue.

The reason the Fed’s stimulus hasn’t led to even cheaper borrowing costs for consumers is the spread between mortgage-bond yields and home-loan rates is wider than usual. That’s partly because banks are reluctant to take on the expensive fixed costs of new staff to process the paperwork and tougher capital requirements are making it less attractive to service loans.

The yield gap is blunting the economic benefits of the Fed’s record accommodation, New York Fed President William C. Dudley said in a speech in New York this month.

“The Fed is pushing really hard to try to get the mortgage rate down,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “There just doesn’t seem to be much of an inclination on the part of banks to get out there and beat the bushes.”

Central bankers have been examining how to reduce the spread to increase the impact of their existing stimulus as they run out of options for further easing.

The Fed has kept its benchmark interest rate near zero since 2008 and this month eased policy by saying the rate would stay low “at least as long” as unemployment remains above 6.5 percent and inflation projections are for no more than 2.5 percent.

At the same Dec. 11-12 meeting, the Fed expanded its quantitative easing program by adding the Treasury purchases to the mortgage-bond buying it began in September.

Bernanke’s latest steps have helped make it cheaper to buy a home. The average fixed rate on new 30-year loans was 3.37 percent in the week ended Dec. 20, down from 3.55 percent on Sept. 13, the day the Fed announced its third round of bond buying, according to Freddie Mac data.

That has left the spread, or difference, between so-called primary and secondary rates at about 1.1 percentage points, compared with less 0.7 percentage point in March and an average of about 0.5 percentage point in years before the credit crisis, according to data compiled by Bloomberg.

“It is imperative that the key channels of the monetary policy transmission mechanism are operating as effectively as possible,” Dudley said in Dec. 3 remarks in New York. “To the extent that the primary-secondary rate spread widens, the reduction in pass-through limits the full impact of the policy actions.”

The spread arises because lenders package home loans into bonds and sell them to investors, giving them fresh cash to make more loans. Lenders set aside a portion of the interest income to pay insurance premiums, and they keep another portion to service the debt.

“Under any other historic circumstances, a wide spread had been enough to cause lenders to modify their rate sheets lower to increase volume,” Merrill Ross, an analyst with Baltimore- based Wunderlich Securities Inc., said in a report last week.

Original post is Bernanke Unhappy Mortgage Rates Aren’t Even Lower by Political Capital.

Photograph by Ty Wright/Bloomberg

Inventory at a warehouse in Avon, Ohio.

Most of the talk around economic indicators today surrounds the better-than-expected and broader-than expected gain in U.S. retail sales.

Don’t miss out on another stat today with a telling story.

Inventories rose at a slower pace in August, one indicator that sales are starting to wear down Corporate America’s stockpiles and that manufacturing might get a year-end boost.

Bloomberg’s Michelle Jamrisko and Shobhana Chandra report that Commerce Department data showed a 0.6 percent increase in goods on hand. That follows a 0.8 percent gain in July.

Getting manufacturing going — and keeping it going — is key. The sector had been a linchpin of the three-year economic expansion. Manufacturing has been cooling lately as demand slowed. If the inventory figures keep going the right direction, manufacturing could be next.

And in case you missed it: Retail sales gained 1.1 percent in September. That followed a revised 1.2 percent increase in August that was the biggest since October 2010 and larger than previously reported, according to the Commerce Department.

Twelve of 13 major categories showed gains last month, led by auto dealers, service stations and electronics stores.

Original post is Forget Retail Sales. Inventories Now Worth a Look? by Political Capital.