Analysis: Over The 'Fiscal Cliff' Could Mean Doom For Tri-State Area Residents
NEW YORK (CBSNewYork) -- Talks to reach a deficit-reduction deal between President Barack Obama and Congress are at a standstill. If lawmakers fail to reach agreement, Tri-State Area residents will be the hardest with stunning tax hikes that will automatically kick in.
If you live in the region the tax collector is going to take it out of your hide whether President Obama and Congress reach a fiscal deal or not, because the president said there will be no agreement unless the wealthy get an increase -- and his definition of "wealthy" is any household making $250,000. That will affect many local families.
"Let's allow higher rates to go up for the top 2 percent," the president said Wednesday.
But if the Washington stalemate continues things are still going to be grim for local tax payers because then automatic tax hikes roll in on Jan. 1.
New Jersey residents would be the hardest hit in the nation, with the average family of four paying an extra $6,933. That same family in Connecticut would ante up an extra $6,653 and in New York, $4,103, according to the nonpartisan research group Tax Foundation.
New York City Mayor Michael Bloomberg said he's worried that if they do strike a deal it will take away the deduction for state and local taxes, which are very high around here.
"That would be an enormous tax on New York State, New York City, California, Massachusetts, Illinois, the heavily taxed states," Bloomberg said.
Meanwhile, President Obama met with business leaders to get them to support his plan to avoid the so-called "fiscal cliff" with a tax hike on top earners.
"We can probably solve this is in about a week. It's not that tough, but we need that conceptual breakthrough that says we need to do a balanced plan," Obama said.
However, Republicans said the Obama tax plan will cripple small businesses. They want to limit deductions and close loopholes.
"Now the revenues we're putting on the table are going to come from, guess who, the rich. There are ways to limit deductions, close loopholes and have the same people pay more money, without raising rates, which we believe will harm our economy," House Speaker John Boehner said.
By the way, not figured into the tax plans that either side is talking about is the temporary 2 percent cut in payroll taxes that is also scheduled to expire at the end of the month. It would hit an estimated 160 million workers with another tax hike of up to $2,200.
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