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Americans to spend 200 billion dollars less in 2013 with tax hikes: White House

11-27-2012 05:49 BJT

WASHINGTON, Nov. 26 (Xinhua) -- U.S. consumers might spend 200 billion U.S. dollars less than they otherwise would have next year because of the looming threat of higher taxes, the White House warned in a report on Monday.

"The President (Barack Obama) believes Democrats and Republicans should come together to renew middle-class tax cuts so families and businesses have more certainty at this critical time for our economy," noted the report, compiled by the National Economic Council and the Council of Economic Advisors of the White House.

The reduced spending of 200 billion dollars was approximately four times the total amount that 226 million U.S. shoppers spent on the Black Friday weekend last year, and such reduction would likely spread across all areas of consumer spending, added the report.

If Congress acts to avoid tax hikes for Americans, every American will get a tax break on their first 250,000 U.S. dollars of income, and income taxes won't go up for 98 percent of U.S. families and 97 percent of small businesses in the country, said the White House.

Domestic consumers are the bedrock of the U.S. economy, having driven more than two thirds of the overall rise in real gross domestic product (GDP) over 13 consecutive quarters of economic recovery since mid 2009.

"And as we approach the holiday season, which accounts for close to one-fifth of industry sales, retailers can't afford the threat of tax increases on middle-class families," stressed the White House.

Unless the U.S. Congress acts by the end of this year, a combination of tax hikes and sweeping spending cuts, dubbed the " fiscal cliff" and with a combined amount of about 600 billion U.S. dollars, was set to kick in. Democrats and Republicans have so far locked horns over how to reduce the nation's public debt hovering at 16.2 trillion dollars and tide over the "fiscal cliff."

 

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Editor:Zheng Limin |Source: Xinhua

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