Let us pause to give credit where credit is due.

The so-called fiscal cliff, and Washington deadlock, dominate the news these days, but the reality is that Congress has accomplished a lot. Thanks to it, as well as to President Obama, action has been taken that will accomplish the following goals:

¶ Provide immediate economic stimulus through the payment of billions of dollars to American individuals.

¶ Significantly increase tax receipts in the current fiscal year, thus reducing the budget deficit, with much of the money coming from higher-income Americans who will voluntarily take steps to increase their 2012 income tax liability.

¶ Bolster charitable giving substantially this year.

¶ Demonstrate which companies rolling in cash have attained that status by keeping profits overseas, rather than bringing them home to reinvest.

Many of those accomplishments could be limited, however, if President Obama and House Speaker John A. Boehner accomplish what everyone says they want — a quick compromise to avoid the automatic tax increases and spending cuts set to begin Jan. 1 — and so reduce the uncertainty that is having such beneficial effects.

Each day that passes without a deal brings more companies declaring special dividends, and more high-flying stocks being sold off to capture capital gains that will be taxed at today’s low rates. Tax advisers for wealthy people who have some control over the timing of their income are advising them to take the income now, rather than to defer it to next year.

Among the companies that have declared special dividends in the last few weeks are HCA, once known as Hospital Corporation of America; Costco, the retailer; and a clothing company whose name neatly symbolizes the spirit of this holiday season: Guess Inc.

The guessing concerns the shape of tax law next year. I cannot recall a December with more uncertainty about the following year. The fact that the stock market is up this month, albeit only a little, should remind us that the cliché “investors hate uncertainty” is nonsense. There is always uncertainty, but sometimes there are reasons to think things will work out well.

One virtual certainty is that taxes on capital gains and dividends are going up for high-income people — the very people who get most of those types of income. Each is now taxed at 15 percent. At a minimum, the Medicare payroll tax is to be extended to all taxable income over $250,000 for couples and $200,000 for individuals, and raised — for them only — to 3.8 percent on that excess income.

But it could be much worse for people who get a lot of that income. If the Bush tax cuts simply expire — the no-deal case — the top capital gains rate goes to 20 percent, plus the 3.8 percent topper for the high-income people. Dividends lose all tax preferences. They will then be taxed at ordinary income tax rates, which will rise as high as 39.6 percent, plus that 3.8 percent.

You can see the impact of that in the stock market. At the end of the year there is usually “tax loss” selling, as people liquidate their losers to get tax losses to offset other gains. This year there is “tax winner” selling. Most of the stocks in the Standard Poor’s 100 — basically, the largest companies in the United States — have risen this month. But five of the six stocks that performed best over the last two years have lost ground, including Apple.

As for dividends, there are extras galore — Bloomberg has counted $21 billion worth — not to mention early payments. Many companies decided to accelerate dividends that would normally have been paid in early 2013, and some did more. Oracle decided to push the first three 2013 dividends into this year. Larry Ellison, its founder and chief executive, will have an extra $199 million in dividend income this year.

Not all companies are doing that, of course. Apple, whose balance sheet indicates it is rolling in cash, has not announced any such move. The problem may be that Apple arranges its affairs so that a lot of its profits seem to be overseas. That lets it avoid American corporate taxes until it brings the money home, so paying the money out would force it to pay a lot to Uncle Sam.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Article source: http://www.nytimes.com/2012/12/14/business/uncertainty-in-washington-windfall-for-others.html?partner=rss&emc=rss