Obama Economists: Tax Hike Would Mean $200B Less in Spending

Faced with tax hikes next year, American consumers will spend nearly $200 billion less than they otherwise would have in 2013, according President Obama’s team of economists.
This reduction of $200 billion is about four times the total amount that 226 million shoppers spent on Black Friday weekend last year, the economists say.
The growth of real consumer spending could dip by 1.7 percentage points in 2013, according to the National Economic Council and the Council of Economic Advisers in a report released today by the White House.
This would be the crippling scenario for the economic recovery  if middle-class tax rates are allowed to rise, part of a package of closing tax breaks and revenue cuts slated for Jan. 1, known as the “fiscal cliff.”
President Obama and Congressional Democrats want to extend all the income tax cuts that benefit families who make less than $250,000 per year.
The report is primarily focused on the impact of Bush-era tax cuts expiring for middle-income Americans, and a failure to adjust the Alternative Minimum Tax.
The Alternative Minimum Tax is a sort of parallel tax system to ensure that Americans pay at least a minimum amount of tax.

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