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
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
mrspelosi

Chris is a welfare recipient who thinks that everything is free darlings.

November 27 2012 at 11:10 PM 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
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
1 reply 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
ilm9p

And do you know what this means for all the dirty animals on welfare in this Country? It means NOTHING! Absolutely nothing. Regardless of what happens, this filth will still lay around in free Section 8 housing, with free utilities, free cable TV, free phones, free healthcare, free breakfast and lunch for their spawn at school, free food, free everything! This vermin that produces absolutely nothing of value to society will still get it all for free. And our taxes are going up to give them even more.

November 27 2012 at 7:49 AM Report abuse rate up rate down Reply
cpo1514

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

The WH is the cause of the fiscal mess!!!!!!!!!!! No budget for 3 going on 4 years... right Barry... still using the Bush budget??/ Didnt take a Finance course at Harvard???

November 27 2012 at 7:37 AM Report abuse +3 rate up rate down Reply
Holli, Chaney

The FIscal Cliff is 100% the tax increases. And its 100% made up as a Fear Mongering to get the GOP to give in.

Democrats are the ones fighting to keep 98% of the Bush Tax cuts which they railed against for the past 9 years.

November 27 2012 at 6:44 AM Report abuse +3 rate up rate down Reply
1 reply to Holli, Chaney's comment
Holli, Chaney

Obama says this will raise 600 billion.. (Over 10 years) Or 60 billion a year off a 1.2 trillion deficit. Obama on his first trip this year gave away 6 billion to Asia. Of course we have to borrow that 6 billion from Asia to give to Asia. He has already spent 10% of his tax increase he hasn't even got yet

November 27 2012 at 6:46 AM Report abuse rate up rate down Reply
Holli, Chaney

There are a lot of people that say "Repubicans dont' mind when they take a government payout.

Well, If Someone steals your wallet..takes the money and tosses it into the Street. You're going to run around and try to get as much as your money back as you can. Doesn't mean you wanted your wallet stolen to start out with.

November 27 2012 at 6:42 AM Report abuse +2 rate up rate down Reply