Washington: It is not hard to project as to what will happen to the economy if lawmakers don’t come to a new agreement ahead of the date when scheduled tax policy changes are to take effect.
The Congressional Budget Office said in its latest economic report that if a deal is not reached by January 1, 2013, the economy will likely fall into recession.
And according to the Tax Policy Institute, nearly 90 percent of Americans will pay more in taxes if a deal is not reached.
According to Fox News, but it could even directly impact a business?
Small Business & Entrepreneurship Council chief economist Ray Keating said that he agreed with the Congressional Budget Office’s belief that falling off the cliff means falling back into recession.
“Having small businesses pay more in taxes will not help spur economic growth”, Keating said.
"For investors, businesses, it will be bad news across the board," he said, adding: "If personal income taxes and capital gains taxes go up, no scenario is a positive [one] for small businesses or the economy".
He said that while the spending side of the issue is a concern, the potential for tax increases is more potent for small business owners who will also have to deal with new taxes under Obamacare, the report said.
According to the report, Chris Whitcomb, tax counsel for the National Federation of Independent Business, said falling off the cliff with no deal will also create more economic concern for business owners considering potential hires or expansion.
"This impacts consumer confidence, as well as a large amount of folks that will want to do business," he said.
"Their cash flow and post-tax profits that would be reinvested will be impacted," he added.
First Published: Tuesday, December 18, 2012, 20:38