White House: Tax Hike Threat Could Hurt Retailers
WASHINGTON (AP) - White House economists warn 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 report Monday that coincides with Congress' return after the Thanksgiving holiday, a White House report says that if lawmakers don't halt the automatic increase in taxes for households earning less than $250,000 in the coming days, consumers might even curtail their shopping during the current holiday season.
The report 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. They say that would significantly slow the economic recovery.
Meanwhile, a big coalition of business groups says there must be give-and-take in the negotiations to avoid the "fiscal cliff" of massive tax hikes and spending cuts.
But the coalition also says raising tax rates is out of the question. The group doesn't care that President Barack Obama campaigned to raise tax rates on the rich.
The same song is sung by groups representing retirees, colleges and countless others.
They say compromise is fine in the fiscal cliff talks. They just want to make sure that any shared pain doesn't reach them.
Obama and congressional leaders must wade through these arguments as they seek a compromise deficit-reduction plan by Dec. 31.
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