The Fiscal Cliff
Some are calling it the “Fiscal Cliff,” others refer to it as “Taxmageddon,” but whatever you call it, the expiration of the 2001 and 2003 tax rates coupled with spending cuts in 2013 could very well drive our fragile economy back into a recession.
The U.S. Chamber of Commerce recently wrote an open letter to Congress warning of this “fiscal cliff”.
In the letter, they call on Congress to work with the President to swiftly address the automatic tax increases and spending cuts would reduce economic growth and could jeopardize economic recovery. At the same time, they urge Congress to be mindful of the absolute necessity of addressing the long-term fiscal imbalance through comprehensive tax reform and fundamental entitlement reform.
According to the letter, “It is the duty and the responsibility of Congress and the administration to promote the common good by addressing the problems facing the U.S. economy in both the short and long terms. While election years are not generally noted for the passage of bi-partisan and forward-looking legislation, the problems confronting the American economy are not ordinary and we urge the Congress and the administration to find common ground.
“Failure to act on the looming year-end tax increases would yield the largest tax increases in American history coupled with draconian, ill-designed, across-the-board discretionary spending cuts. Economists from across the political spectrum warn that such tax increases and spending cuts would have a devastating effect on a still sputtering U.S. economy, quite possibly returning it to recession. Moreover, the onset of harm to the economy will not wait until yearend. The very notion that the fiscal cliff exists has increased uncertainty, which has already begun to retard consumer spending and hamper business investment.”
Congress must act now to prevent the largest tax increase in American history from taking effect next year, as well as enact fundamental tax and spending reform that will drive American competitiveness and growth in the long term. Once again, we “urge” you to contact your Congressmen and ask them to renew current tax rates – not encourage more failure.
Click here to send a letter to your Congressmen
For more information:
U.S. Chamber of Commerce's open letter to Congress
Fiscal Cliff Countdown Website
Background on the Fiscal Cliff
Video: Bruce Josten with U.S. Chamber speaks to Fox Business