The White House warned Monday that middle-class families could see their taxes increase over $2,000 and the economy impacted negatively, if Congress failed to avoid the so-called “fiscal cliff.”
The report, entitled “The Middle-Class Tax Cuts’ Impact on Consumer Spending and Retailers” makes clear if middle-class tax cuts expire at year’s end, consumption would likely be reduced by $200 billion next year and if the current law was made permanent, the resulting fiscal restraint in 2013 would be approximately $500 billion or more than 3 percent of GDP.
Put another way, according to the report, “If Congress doesn’t act, middle-class families will see their income taxes go up on January 1st. The typical middle-class family will see their taxes go up by $2,200 next year, negatively impacting businesses and retailers across the nation.”
President Obama has been urging Congress to take action and stop holding the middle class and economy hostage over a disagreement on tax cuts for households with incomes over $250,000 per year. In fact, the US Senate has already passed a bill to renew the middle class tax cuts, but it remains stuck in the Republican-led House of Representatives.
From the report:
“If Congress acts, every American will get a tax break on their first $250,000 of income, and income taxes won’t go up for 98 percent of American families and 97 percent of small businesses. The President believes we must take a balanced approach to reduce our deficit, that’s why he has laid out a $4 trillion deficit reduction plan that asks the wealthy to pay a little more and preserves the investments we need to grow the economy. The President has already signed $1.1 trillion in spending cuts and he looks forward to working with Democrats and Republicans on a balanced approach to further reduce our deficit. This is an important moment not just to avoid the fiscal cliff—but to lay the groundwork for an economy that will support a healthy middle class, restore economic certainty, and lead to long-term job growth.”
See the full Report Here.
