Akron
Beacon Journal
White
House: Tax hike threat could hurt
retailers
Beacon Journal wire services
November 27, 2012 - 12:36 AM
WASHINGTON:
On the heels of record sales over
the Black Friday weekend, the White House warned that automatic federal
tax
increases set for next year could hurt the rest of the holiday shopping
season
and would likely crimp consumer spending by about $200 billion in 2013.
The
report released Monday projects that if
Congress fails to act and middle-income taxes rise, consumer spending
growth
could be sliced by 1.7 percentage points and economic growth overall
would
probably be cut by 1.4 percentage points in 2013. Those are not small
numbers
given that consumer spending drives about two-thirds of U.S. economic
activity
and that the American economy has been growing by just a little more
than 2
percent since the recovery began in mid-2009.
The
report from the White House Council of
Economic Advisers looked only at the impending income tax hikes for
taxpayers,
including a higher alternative minimum tax. These tax increases are
part of the
so-called fiscal cliff — a combination of mandated fiscal spending cuts
and
higher taxes that are slated to kick in next year and that on the whole
would
hit the economy by more than $500 billion and likely send the country
back into
recession in 2013.
The
report is broadly consistent with forecasts
by the Congressional Budget Office and leading private economists, and
it comes
after retailers amassed a record $59.1 billion in sales from
Thanksgiving day
through Sunday, up from $52.4 billion a year earlier, according to
estimates
from the National Retail Federation…
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the rest of the article at the Akron
Beacon Journal
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