Economist Discusses the Fiscal Cliff Issue
Congress and the White House continue to go back and forth on the "fiscal cliff."
Ball St. economist Dr. Mike Hicks says if both sides pull each other's main bargaining chips, which are the Bush tax cuts and defense cuts, the nation could drop into another recession.
Dr. Hicks says if Social Security taxes are boosted back to pre-recession level, that would be a 2-percent tax increase on every worker making under about $110,000 a year. Hicks If the Bush tax cuts expire, about 1 in 4 households that have not been paying taxes since 2002 will be new income taxpayers, and the majority votes Democrat, and Hicks says Democrats are nervous about raising taxes on that group.
Hicks says anyone making between $30 and 80,000 a year will be hit hard if a compromise isn't reached by January 1st.