The fiscal cliff, which will mean the end of last year’s temporary payroll tax cuts (resulting in a 2 percent tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, a rollback of the “Bush tax cuts” from 2001-2003, and the beginning of taxes related to President Obama’s health care law, has some Caribbean Americans worried while others are optimistic a deal will be reached before midnight on Dec. 31st.
Val Williams, vice president at Aegis Capital, calls the “political drama” ridiculous and is hopeful the U.S. does not go over the so called cliff.
If it does says Williams, “the impact on the financial sector will be great impacting many sectors including the world economy as the stock market reacts in a downward manner impacting 401K’s pension funds of all Americans, including Caribbean Americans.”
He argued that the Caribbean region would also feel the impact from this fall out since when the U.S. sneezes, the Caribbean often catches a cold.
“People doing business there will hold back. Some people may not get paid and people here won’t have money for remittances that help the economies there,” added Williams.
He urged all voters to “call congress and tell them a piece of their mind” to make sure they pull back the economy from such a financial fallout.
President Obama would need a rare bipartisan vote with at least 26 Republicans joining all 191 Democrats to make this vote happen even as a new Gallop poll shows that 48% of Americans are doubtful, a deal will be reached before Jan. 1, 2013.
Don Profitt, a Caribbean American, is among the 48 percent.
“I think we will go over this so called cliff for three reasons: (i) The Republicans are still playing politics and not adhering to the wishes of the majority of folks in this country – .raise the rate on the wealthy 2%; (ii) They’re still trying to give the POTUS a hard time in passing policies beneficial to the poor and middle classes – No Compromise and (iii) House speaker Boehner is caught between a rock and a hard place, since his failed attempt to pass his version of a plan. Who to listen to the Tea party or the hard line conservative Republicans?,” commented Profitt.
Minna Lafortune, a Caribbean American worker and organization leader, is worried about the implications on her bottom line.
“I am concerned how this will impact our take home pay , tax credits and benefits that many in our nation need to survive,” said Lafortune.
Allison Skeete, a New Jersey Guyanese national, says she is concerned “ that we will face the same fate of the Regan era with a sloppy second term as the players’ change who are working with POTUS.”
“It’s the same old nonsense and we’re forced to swallow the bitter pill and smile while doing it,” added Skeete. “I want more pay to pay more taxes and that won’t be happening.. We now have more benefits costs but less annual increase and I damn sure am not in a wealthy tax bracket… It’s the same old nonsense and we’re forced to swallow the bitter pill and smile while doing it…”
But many others are optimistic including Caribbean nationals Tony Welch, Sharon Gordon, Annan Boodram and W. Dave Dowrich, vice president at Goldman Sachs.
“We can’t afford to,” says Dowrich, pointing to the huge economic fall out going over the cliff could mean.
The Tax Policy Center, a nonpartisan research group, says going off the cliff would affect 88 percent of U.S. taxpayers, with their taxes rising by an average of $3,500 a year and unless lawmakers agree to an extension, federal long-term jobless benefits would expire for millions of unemployed Americans.
And about $1.2 trillion in federal spending cuts are scheduled to kick in next year, or roughly $110 billion a year for 10 years while the government-run health care program for seniors would face a 2 percent cut in Medicare payments to providers and insurance plans, which amounts to a reduction of $11 billion next year.
But Lloyd Blenman, Professor of Finance at the University of North Carolina-Charlotte, insists it is “all too uncertain at this stage.”
“It could be significant or it could be a non-event,” Blenman told NAN. “Who knows? They may actually strike a compromise before the end of the year, or if not, make the changes and apply them retroactively.”
With time running short, the most Congress seems capable of passing before Jan. 1 is a stopgap deal avoiding the disaster that would come from doing nothing.
