Hot Topic: Going off the Fiscal Cliff - FOX 32 News Chicago

Hot Topic: Going off the Fiscal Cliff

WASHINGTON -

In the fiscal cliff wars, a pivotal battle is raging between Democrats demanding to raise revenue by boosting tax rates on the nation's highest earners and Republicans insisting on eliminating deductions and other tax breaks instead. Which is better for the economy? Analysts say it depends.

Economists generally agree that a simpler tax code with lower rates and fewer deductions, exemptions and credits would help the economy. With fewer tax preferences, people would be more likely to seek the best investments for their money instead of the most lucrative tax breaks. And lower rates would leave them more money to spend. Both would add oomph to the economy.

But ask whether the higher tax rates that President Barack Obama wants would hurt the economy more than curbing deductions, as Republicans assert, and the picture is less clear. While many economists say the economy theoretically would work more efficiently if the tax code provided fewer preferences, many said it would depend on which deductions lawmakers curb -- a complicated exercise in a world where one person's wasteful loophole may be viewed by others as an economic lifeline.

For example, one of the biggest tax breaks is the widely popular deduction for interest on home mortgages below $1 million. Because of it, the government this year will take in $87 billion less than it would if the deduction didn't exist.

That deduction allows many to buy homes they otherwise couldn't afford and is strenuously defended by the housing industry. But critics say it does little to help lower-income people while it encourages others to go into debt for costlier homes than they need -- an activity they say taxpayers should not subsidize.

So, we want to know -- Do you think we willgo off the fiscal cliff and what are you doing, if anything, to prepare? Post your responses on our FOX 5 Atlanta Facebook page, tweet us @GoodDayAtlanta, or email us at goodday@myfoxatlanta.com! We'll read some of your responses during the 9 a.m. hour of Good Day Atlanta.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Good Day ArchiveMore>>

  • Back to School Jamboree with Hosea Feed The Hungry

    Back to School Jamboree with Hosea Feed The Hungry

    Hosea Feed the Hungry will host their annual Back to School Jamboree on Sunday, July 13, 2014 from 10:00 a.m. until 3:00 p.m. at Turner Field. Children will receive a backpack filled with school supplies.

    Hosea Feed the Hungry will host their annual Back to School Jamboree on Sunday, July 13, 2014 from 10:00 a.m. until 3:00 p.m. at Turner Field. Children will receive a backpack filled with school supplies.

  • Outlet Mall shopping secrets

    Outlet Mall shopping secrets

    Friday, August 29 2014 10:43 AM EDT2014-08-29 14:43:26 GMT
    I think this is what many of us assume about outlet mall shopping -- we get rock bottom prices on everything from clothes to housewares on brand names that are either leftovers from last year or this year's overstock. Well, it's not quite like that.
    I think this is what many of us assume about outlet mall shopping -- we get rock bottom prices on everything from clothes to housewares on brand names that are either leftovers from last year or this year's overstock. Well, it's not quite like that.
  • Good Day Atlanta

    Pike Nurseries: Labor Day entertaining and planting

    Pike Nurseries: Labor Day entertaining and planting

    Friday, August 29 2014 9:08 AM EDT2014-08-29 13:08:02 GMT
     Did you know that Pike Nurseries has a Pinterest Board that is chock-full of great entertaining ideas for the Holiday Weekend?
     Did you know that Pike Nurseries has a Pinterest Board that is chock-full of great entertaining ideas for the Holiday Weekend?
Powered by WorldNow

205 N. Michigan Avenue
Ground Floor
Chicago, IL 60601
Station Operator: (312) 565-5532
Newsroom: (312)565-5533

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices