It seems as though everyone is aware of the so-called fiscal cliff, but few are scared of it.
Indeed, the buoyancy of the stock market lately suggests that traders expect a compromise in Congress on the tax increases and government spending cuts that are widely expected to cause a recession if implemented.
What they may not realize is that any compromise is likely to include tax increases and spending cuts — barely distinguishable from no deal at all. Stocks could take a hit either way, and with tax rates due to rise more on dividend payments than on other forms of income, companies and sectors known for high-dividend yields could be hurt most.
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