New Yorkers Will Take Big Hit If Nation Goes Over Fiscal Cliff
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According to President Barack Obama's Council of Economic Advisers, should the nation go over the so-called fiscal cliff, New York could face a major slowdown in its economic growth.
The fiscal cliff was a mechanism created last year when Obama and Congressional Republicans failed to reach a long-term budget agreement. If they fail again to reach a new agreement by January, large spending cuts and tax increases will kick in automatically.
With the median income for a New York state household at $81,500 a year, the backlash could be painful.
"A typical family in New York would face a $2,200 income tax increase next year if the tax cuts lapse," said Jason Furman of the National Economic Council. "This wouldn't just hurt families, it would hurt their purchasing power. So New York would lose $14 billion of retail sales which would have a significant impact on its economy."
The retail industry in New York state employs more than 900,000 people. A drop off in spending in that sector could lead to job losses.
Government spending would also be cut. That means there is potential for further job loss in other areas as well.
The Obama Administration says its plan would avoid tax increases for 97 percent of New Yorkers making below $250,000.
But Republicans say it's not a balanced approach.