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Residents set politics aside in concern over ‘fiscal cliff’

POSTED: December 27, 2012 11:59 p.m.

Ask about the “fiscal cliff” and people randomly interviewed on Thursday didn’t talk party politics or slam the actions of President Barack Obama or House Speaker John Boehner.

Instead, they talked about the impact on their bank accounts and fears in the country’s overall economy if New Year’s Day comes and goes without Congress agreeing on a wide-ranging set of tax and spending issues.

Politicians “are playing a very dangerous game of chicken and I think the American people blame both parties,” said Barclay Rushton, a partner with Rushton & Co. in Gainesville. “They just want to see something done.”

He further believes that “Congress has done more to stifle the economy than any kind of bailout.

“We have clients who are trying to plan on what to do in their businesses next year and they have no direction.
“There are so many tax laws due to sunset this year that really affect the expansion of business.”

Obama returned to the White House on Thursday while congressional Democrats and Republicans appeared no closer to a compromise that would avert across-the-board tax increases and cuts to government programs.

Worse yet, many economists have said that lack of a compromise could trigger a recession.

Failure to avoid the cliff doesn’t necessarily mean tax increases and spending cuts would become permanent, as Congress could pass legislation canceling them retroactively after it begins its work next year.

But delays in reaching a decision have already caused problems, with businesses waiting on firm direction on taxes before making a move, Rushton said.

“I can’t imagine any business being run like we run our government,” he said. “Every year, they decide what they’re going to do the next year at the 11th hour. I guess we’re at the 12th hour, now.”

Without congressional action, current tax rates will expire at midnight Monday, resulting in a $536 billion tax increase over a decade that would touch nearly all Americans.

In addition, the military and other federal departments would have to begin absorbing about $110 billion in spending cuts.

Taxes would jump $2,400 on average for families with incomes of $50,000 to $75,000, according to a study by the nonpartisan Tax Policy Center.

Jill Fodstad, shopping with her mother at the nonprofit Rahab’s Rope on the downtown Gainesville square, said she has been following the developing events in Washington somewhat closely.

“I guess my take on it, as a younger adult who is attempting to establish herself and career, is it’s scary to think about the impact the fiscal cliff could have ... on my ability to have enough money to own a home and help provide for myself and my (family),” said the Gainesville native, now living in Baltimore.

“I think it’s unfortunate that people can’t come to a conclusion, that we can’t work together,” Fodstad said. “I hope they can come to a conclusion — something that will benefit us as a whole.”

Jackie Wallace, president and chief professional officer of United Way of Hall County, said she is worried that more taxes for Americans could translate into smaller donations for nonprofit organizations.

“It also may limit or do away with the charitable deduction,” she said. “If that comes to pass, that’s obviously a concern. ... There’s just a lot of questions for us as a society, as nonprofits, as individuals. We’re just in a wait-and-see pattern.”

Eddie Tatum, owner of Red Shoe House at 822 Oak St., Gainesville, said he hasn’t been eyeing the cliff that closely, but he is certain of one thing: “We can’t afford any more taxes.”

“Congress needs to work for the common interest, not selfish, spoiled, rich folks,” he said. “... Both parties have been so stubborn, they can’t accomplish anything.”

The Associated Press contributed to this report.


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