Consumers and business owners concerned over tax bites

Posted by Kristi Scott January 29, 2013 0 Comment 376 views

Even though President Obama agreed that the budget for federal spending should be cut, this doesn’t mean that there aren’t any other options available. A deal was struck over the fiscal cliff issue a couple of hours before the deadline and it involves raising about $700 billion. This money will come from the higher taxes that will be imposed on the wealth during the coming year. However, business experts believe that this isn’t enough at all to get rid of the country’s debt during the next five years.

Both parties ended up agreeing on the deal especially that spending should be cut. When it comes to the budget of the White House, discretionary spending is going to shrink except for the military budget. Even though the President has resisted some of the demands of the Republican Party to slash some of the entitlements, he is still willing to search for additional savings when it comes to Medicare.

Business experts believe that there is another option that the government should opt for which is raising money from everyone, not only the upper class. The Republican Party has also explained several times that President Obama is looking to narrowly raise some money and it isn’t fair to only aim upper class taxpayers and businesses. Higher taxes will undoubtedly cause stress for many lower or middle class families. There is no doubt that the United States has been suffering from falling income and unemployment for a long time now. However, many families might prefer paying additional taxes instead of losing some government services that they need.

The amount of tax hits will depend on the federal government’s bill size. The government currently needs about $1.5 trillion and additional reduction in the deficit to successfully stabilize the debt. This will entail them to add extra regulations on the budget and deals they have reached. Citizens from the lower class have already started worrying about whether they will have to pay taxes or not. Many of them aren’t even getting paid well or receiving some of the services they should from the government.

Business owners are also beginning to get worried as many of them believe that these tax hikes are going to stop consumers from purchasing their products or using their services easily. The increase in taxes will definitely result in many consumers not buying products or services like they did previously due to have a lower budget.

About Kristi Scott

Kristi Scott joined GDP Insider in 2005 as a Wall Street reporter for the Business and Market section. Kristi covers the stock market, financial markets and personal finance. Her awards have come from the National Federation of Professional Writers, the Ohio Newspaper Association, the Cleveland Press Club, the Society of Professional Journalists and Suburban Newspapers of America. Kristi was named SNA's national Journalist of the Year

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