Did You Know...

   

White House report: Not following the president's plan on taxes could ruin the holiday economy

Share
By Doug Powers  •  November 26, 2012 12:03 PM

**Written by Doug Powers

Alternate title: Raise taxes on the rich or Christmas gets it!

From Politico:

In a Monday report, the White House warned that failure to resolve the impasse over a tax and deficit deal could undermine consumer confidence this holiday season.

A new report from the National Economic Council and the Council of Economic Advisers timed to the online shopping holiday “cyber Monday” estimated that consumers could spend close to $200 billion less, while GDP growth could slow by 1.4 percentage points in 2013.

The report also warns that the psychological impact of a looming middle class tax hike could put a huge dent in retail sales over the holidays — traditionally the most important retail period of the year.

“Consumer confidence over the next several weeks is particularly important,” the report warns. “If Congress does not act on the president’s plan to extend tax cuts for the middle-class, it will be risking one of the key contributors to growth and jobs in our economy at the most important time of the year for retail stores.”

If raising taxes on households earning less than $250k per year would be bad for the economy, why wouldn’t raising taxes for households earning more than that also have a negative economic impact? Don’t the “rich” shop too?

A snapshot of where negotiations stand at the moment:

For now, Democrats are seeking $1.6 trillion in new taxes over the next decade collected from about 3 million families at the pinnacle of the income spectrum — those earning more than $250,000 a year. The Democrats want to start by letting the top two tax rates return to 36 percent and 39.6 percent when the Bush tax cuts expire.

Republicans insist on maintaining the Bush rates, at 33 percent and 35 percent, through 2013. Instead, they want to raise cash by rewriting the tax code to eliminate individual loopholes and deductions, an approach House Speaker John A. Boehner (R-Ohio) argues would be less harmful to businesses and the economy.

They’d also have to retroactively re-write the code to eliminate the preemptive dumping of assets and things like front-loaded contracts designed to avoid the coming tax hit, because that’s what’s happening.

If a “deal” is reached it will probably be more of the same: Higher taxes and a debt ceiling increase now purportedly offset by spending cuts that would go into effect the next time Halley’s Comet swings through the neighborhood. Instead of a plunge from the fiscal cliff we’ll probably end up getting another Triple Lindy into economic oblivion.

**Written by Doug Powers

Twitter @ThePowersThatBe

blog comments powered by Disqus

Fast Lerner: Subpoenaed tech guy who worked on Hillary’s private server says he’ll plead the 5th (sound familiar?)

September 2, 2015 08:07 PM by Doug Powers

drebin1

Nothing to hear here.

Peer-reviewed study: Obama’s mixed messages contributing to climate change, mass confusion

September 1, 2015 10:19 AM by Doug Powers

obamaclosing

Spending ensues, no matter what (and that’s the important thing)

Peak pandering: Ahead of Alaska visit, Obama officially renames Mt. McKinley

August 31, 2015 07:48 AM by Doug Powers

obamapoint

“The mountain has spoken”

‘Degrade and ultimately destroy’ ISIS update: JV team ‘growing like crazy’

August 30, 2015 12:03 PM by Doug Powers

obamaisis1

Time to escalate the war on climate change

With friends like these: Iran deputy foreign minister welcomes Harry Reid’s Senate filibuster intention

August 30, 2015 09:32 AM by Doug Powers

harryreid

For the filibuster before he was against it before he was for it again


Categories: Barack Obama, Democrats, Harry Reid, Iran

Follow me on Twitter Follow me on Facebook