Some are calling it the “Fiscal Cliff.” Others refer to it as “Taxmageddon.”
Whatever you call it, the expiration of the 2001 and 2003 tax rates coupled with sequestration cuts in 2013 could very well drive our fragile economy back into a recession.
Congress must act now to prevent the largest tax increases 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.
In addition to extending the 2001 and 2003 tax rates (including current marginal rates, dividend and capital gains rates, and estate tax relief), Congress must extend vital expired and expiring business tax provisions, and provide alternative minimum tax (AMT) relief.
What are the consequences if they don’t?
As the Financial Times says:
If Congress fails to pass new legislation by December 31, it would trigger a fiscal tightening of $600bn in 2013 in the world’s largest economy, probably tipping it into recession in the first half of the year.
The drag would come mainly from the expiration of more than $300bn Bush-era tax rates, as well as the impact of $100bn in automatic spending cuts to domestic and defense spending. Other tax breaks would also expire, including a payroll tax cut worth $120bn. Soon after, in early 2013, the US is expected to hit its borrowing limit again, which could worsen the picture by adding the spectre of default and a financial crisis.
To really take a stand, click here to give your testimony on how the current tax uncertainty is affecting your business' ability to grow and hire. These stories will be shared with members of Congress to underscore the importance of their action.
With your help, we can save stop our economy from going off the fiscal cliff next year.