A perfect storm of macro-economic policy kicked off 2013. The result of laws lapsing from 1997, 2001, 2003, 2010, and 2011 converged on one date; 2013.
1997: The Balanced Budget Act of 1997 mandates cuts to doctor payments if Medicare spending exceeds a certain benchmark. Congress has delayed these cuts for 15 years. If they were not patched this year, doctor payments would have been cut by a third and Medicare patients could be denied care.
2001: The Economic Growth and Tax Relief Reconciliation Act of 2001, aka the "Bush Tax Cuts", reduced federal income tax rates across the board from a top rate of 39% to 35%.
2003: The Jobs and Growth Tax Relief Reconciliation Act of 2003 is part two of the "Bush Tax Cuts". It reduced Capital Gains tax rates (taxes paid on the amount a stock increases in value). The top capital gains rate went from 15% to 20%..
2010: The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the tax rates from the 2001 and 2003 tax cuts which were supposed to lapse in January 2011 and extended them two years to January 2013. This is the tax part of the fiscal cliff.
2011: Payroll Tax Reduction: The 6% payroll tax levied on employees was reduced to 4%.
Budget Control Act: Cuts one trillion dollars from the federal budget over ten years. Half comes from the defense budget and the other half from the non-defense discretionary budget (welfare, education, etc.).
