Consumer spending by New Yorkers would drop roughly $13.2 billion next year if Congress does not renew tax cuts for families earning less than $250,000 annually, according to the latest argument advanced by the White House.
The estimate comes from President Obama’s Council of Economic Advisers, which calculates that consumer spending would drop by almost $200 billion nationwide next year if congressional Republicans don’t agree to the president’s terms for renewing the Bush administration’s tax cuts.
Without an agreement between the administration and Congress, the tax cuts will expire at the end of the year. People generally won’t pay the higher tax rates until early 2014 when they file their 2013 tax returns, but employers will begin withholding more payroll taxes early next year to reflect the higher rates.
According to the White House, “The retail industry employs 14.8 million Americans – including 915,400 in New York – and has been a key part of the recovery. In the 40 months since the recession ended in June 2009, the retail industry alone has been responsible for more than 9 percent of overall employment growth and has added 438,000 jobs in the past 32 months.”
Obama plans to visit a toy factory in Hatfield, Pa. to focus on that theme. The factory makes Tinkertoy, K’NEX Building Sets and Angry Bird Building Sets.