Fiscal Cliff Tax Hike Fears Could Hurt Retailers, White House Warns

Fiscal CliffBy JIM KUHNHENN

WASHINGTON -- White House economists warned Monday that the uncertainty of a potential hike in taxes next year for middle class taxpayers under the looming fiscal cliff could hurt consumer confidence during the crucial holiday shopping season.

In a new report that coincides with Congress' return after the Thanksgiving holiday, the White House says that if lawmakers don't halt the automatic increase in taxes for households earning less than $250,000, consumers might even curtail their shopping during the current holiday season.

"As we approach the holiday season, which accounts for close to one-fifth of industry sales, retailers can't afford the threat of tax increases on middle-class families," the report says.

The study by President Barack Obama's National Economic Council and his Council of Economic Advisers also says a sudden increase in taxes for middle-income taxpayers would reduce consumer spending in 2013 by nearly $200 billion, significantly slowing the economic recovery.

The figures echo estimates by private forecasters and by the Congressional Budget Office.

Congress and Obama have until the end of the year to avoid across the board tax increases that would do away with rates set during the administration of President George W. Bush and restore higher tax rates in place during President Bill Clinton's administration when the economy was robust and the federal government had a budget surplus.

Many middle income taxpayers also would be exposed to automatic tax increases under the Alternative Minimum Tax, which is designed to guarantee a certain level of tax payment by wealthier taxpayers.

According to the report, a married couple earning between $50,000 and $85,000 with two children would see a $2,200 increase in their taxes.

Obama wants the Bush-era tax rates to remain at their current level for households earning less than $250,000. He is calling on Congress to increase taxes for families earning more than that threshold.

Obama's plan is part of an overall deficit reduction package that would increase tax revenue by about $1.5 trillion and reduce spending by a similar amount over 10 years.

Congressional Republicans, led by House Speaker John Boehner of Ohio, have said they are open to including tax revenue in any budget package but have balked at any plan that raises tax rates on wealthier taxpayers. They argue that higher rates would also hit some small businesses.

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freethedems2012

Lets go over the fiscal cliff and be done with it. We are going to crash sooner or later.

November 28 2012 at 3:12 PM Report abuse rate up rate down Reply
t_trevor2

Anyone think just maybe the correlation between what chris says was paid for his education (nothing) and what he received in return (nothing) might be more than just a coincidence?

November 28 2012 at 9:53 AM Report abuse rate up rate down Reply
1 reply to t_trevor2's comment
freethedems2012

LOL. Of course

November 28 2012 at 3:12 PM Report abuse -1 rate up rate down Reply
ronafishon

The fiscal cliff is just one problem. Every American will have to purchase health insurance at a cost of 3-5 thousand dollars per year per person.

November 27 2012 at 11:24 PM Report abuse +1 rate up rate down Reply
dembaitnswitch

Schools are free, wtf are you talking about?

November 27 2012 at 2:20 PM Report abuse -2 rate up rate down Reply
2 replies to dembaitnswitch's comment
freethedems2012

Chris must have gone to a free school. Ya get what ya pay for.

November 27 2012 at 4:42 PM Report abuse +1 rate up rate down Reply
chris1011

Yup, went to public school and high school and never paid a dime of tuition.

November 27 2012 at 5:26 PM Report abuse -1 rate up rate down Reply
2 replies to chris1011's comment
freethedems2012

The taxpayers did or don't they count in your liberal mind.

November 27 2012 at 6:24 PM Report abuse rate up rate down
t_trevor2

chris, I always knew you were a teat suckling 47%er possessing an education commensurate with its cost!

November 27 2012 at 10:45 PM Report abuse +2 rate up rate down
gmydogbud

Our country is in the toilet, not due to the every day Joe and Jane but due to the highly educated, ivy league - CROOKS ... Since they know so much and are so smart, they must have, knowingly done this to the citizens of these United States! The politicans are living quite well, while they have joyfully destroyed the lives of the Middle Class. Where is their fairness? They are paid well, have allowed themselves to engage in insider trading, have made themselves worth hundreds of millions, while the Middle Class, is unable to feed, cloth and educate their children. The politicans enjoy, fine cloths, cars and many, many vacations, while the Middle Class are no longer able to by or keep the homes they have/had. Nice work, boys and girls!!!

November 27 2012 at 2:04 PM Report abuse rate up rate down Reply
1 reply to gmydogbud's comment
chris1011

Gee, I haven't seen any naked uneducated children running around. Last I looked, schools for children still exist and are free.

November 27 2012 at 2:07 PM Report abuse -1 rate up rate down Reply
2 replies to chris1011's comment
t_trevor2

Free?

LOL!

#DunceAlert

November 27 2012 at 2:16 PM Report abuse +2 rate up rate down
dembaitnswitch

No, just the one's that hang aroung the schools with their pants almost on the ground, selling drugs to the school kids on the way home.

November 27 2012 at 2:18 PM Report abuse rate up rate down
dembaitnswitch

So, let me guess Somey, I'll go out on a limb here and I believe you will say that if Obama gets his way and he raises taxes on everyone that makes 250k a year, that it will stop us from going over the fiscal cliff......Am I right?

November 27 2012 at 10:56 AM Report abuse +1 rate up rate down Reply
2 replies to dembaitnswitch's comment
dembaitnswitch

I'm sorry if my question isulted your intelligence ..................care for a collector's item Twinkie ?

November 27 2012 at 11:04 AM Report abuse +1 rate up rate down Reply
chris1011

Keep beating your drum. Maybe yell some, wave arms. Maybe carry some funny signs to get attention, and hats. Don't forget your hats..

Now off you go.

November 27 2012 at 1:17 PM Report abuse -1 rate up rate down Reply
5 replies to chris1011's comment
dembaitnswitch

Somey, you know you can probably get a GED, those on the government dole have that option as well as getting a PELL grant later on after you get your GED, to further your education, that way you don't have to act like a smartass everytime someone asks you a question that you don't have an answer for. Are you going to spend the rest of your life accepting handouts from the government ?

November 27 2012 at 10:35 AM Report abuse +1 rate up rate down Reply
1 reply to dembaitnswitch's comment
Somey

"Somey are you the vermin that ilm9p speaks about ?"

You might start by using a little intelligence in your questions; if you really do have some education, like you say, you would know better then to ask this kind of question. How does anyone react to an insulting question like this: get a brain you need one.

November 27 2012 at 10:42 AM Report abuse rate up rate down Reply
2 replies to Somey's comment
dembaitnswitch

Somey............." Did you get your degrees from a box of Cracker Jacks." ..........You mean like that right?

November 27 2012 at 10:45 AM Report abuse +1 rate up rate down
dembaitnswitch

You didn't know how to reply "NO" I only asked you a question and you got all bent out of shape.

I do think ilm9p is crude in his description, but truthful.
So how long are you planning to milk the system ?

November 27 2012 at 10:49 AM Report abuse -1 rate up rate down
Somey

dembaitnswitch

Somey are you the vermin that ilm9p speaks about ?
==================================================
Are you an idiot????????????

November 27 2012 at 10:04 AM Report abuse rate up rate down Reply
2 replies to Somey's comment
dembaitnswitch

No, I have a couple degrees, you ?

November 27 2012 at 10:08 AM Report abuse +1 rate up rate down Reply
4 replies to dembaitnswitch's comment
dembaitnswitch

How come you answer a question with a question ?

November 27 2012 at 10:13 AM Report abuse rate up rate down Reply
dembaitnswitch

Somey are you the vermin that ilm9p speaks about ?

November 27 2012 at 9:52 AM Report abuse rate up rate down Reply
Somey

t_trevor2

someonedumb already told us he is a parasite that received a free phone and is getting free service via Lifeline.

The problem is that it's a cheap TracFone, and someonedumb thinks his staggering stupidity is worthy of an upgrade.
=====================================================================
"staggering stupidity "
We see plenty of your "staggering stupidity" in your comments.

November 27 2012 at 8:04 AM Report abuse -2 rate up rate down Reply
2 replies to Somey's comment
t_trevor2

someondumb once again illustrates the height of his intellect:

"I know you are, but what am I"

November 27 2012 at 8:15 AM Report abuse +1 rate up rate down Reply
1 reply to t_trevor2's comment
Somey

Another wacky comment by the AOL message board psycho

November 27 2012 at 10:10 AM Report abuse -1 rate up rate down
dembaitnswitch

So are you on public assistance, how can you afford the internet ?

November 27 2012 at 8:24 AM Report abuse rate up rate down Reply
4 replies to dembaitnswitch's comment