Result of legislation unknown at local level
While a dive over the fiscal cliff was averted, the deal that averted potential economic disaster has left some locals cold and in the dark about what the result will be.
The last-minute scramble to reach an agreement on New Year's legislation averted scheduled tax increases and spending cuts that would have triggered an impending economic crisis. However, going over the fiscal cliff would have significantly reduced the deficit, combining cuts to domestic and military spending with tax hikes on a majority of Americans.
On his Facebook account, Rep. John Fleming (LA-4) said he voted against the bill because, “This legislation will increase taxes on small business owners, killing jobs, and do absolutely nothing to cut wasteful Washington spending.”
Tax cuts will be extended for individuals making less than $400,000 and the Alternative Minimum Tax will be permanently lifted to reflect inflation. Meanwhile, those who make above $400,000 will now be subject to a 20 percent tax rate on their capital gains and dividends in addition to higher income taxes.
As a result of the agreement, President Barck Obama will be able to renew key tax cuts passed as part of his 2009 stimulus package and extend unemployment insurance.
Fleming later addressed the bill through email saying it enacts $10 of tax increases for every $1 of spending cuts, increases direct spending by $332 billion, spends another $30 billion extending unemployment benefits and continues dozens of tax credits.
“When I ran for congress 5 years ago and every day since, I committed to Americans that I would always stand for less taxes, smaller government and economic freedom. This bill will increase taxes allowing for even more government wasteful spending and an even larger, more intrusive federal government sitting ready to micromanage your life,” he added.
U.S. Chamber of Commerce President and CEO Thomas J. Donohue noted the Congressional Budget Office has warned that the tax hikes that will take place will mean slower growth, fewer jobs, and less prosperity for all Americans.
For Tom Lawson, owner of Advanced Air in Bossier City, his major concern was also over the national debt, noting that there are plenty of jobs and growth locally.
“There's plenty of money in Shreveport-Bossier, there's just no confidence so people are holding onto it,” said Lawson. “We need to keep a good attitude. We still have a good economy, but people are scared.”
Whatever fallout from the legislation that will trickle down to Bossier is still too uncertain to tell. But Lawson is optimistic.
“I feel positive about it, we have a lot of things going for us here in Shreveport-Bossier and and it's too soon to say it won't work,” said Lawson.
But deficit hawks and the U.S. Chamber of Commerce are still hoping for a spur in economic growth without spending.
"The new Congress and the administration must begin work immediately to slow runaway spending through structural entitlement reforms. They must also spur faster economic growth through comprehensive tax reform and a rapid expansion of American energy, which would create jobs and generate government revenues,” said Donohue. “This is the only formula that can reduce budget deficits and control our unsustainable national debt.”
And Fleming warns that it could get worse.
“(Obama) wants what he’s always wanted: more taxes and more spending. That’s a formula for disaster for our nation’s economy, and it’s one that I will continue to oppose.”