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US 'Fiscal Cliff': tax crisis pending at year-end

US 'Fiscal Cliff': tax crisis pending at year-end
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As the race for the White House enters its final stretch, another drama is also concerning US policymakers: a flood of tax rises and spending cuts all due to come into effect at the same time, known as the ‘Fiscal Cliff’.

It leaves US politicians with a conundrum, as Roberton Williams of the Tax Policy Centre explained to euronews: “The argument is over the top two percent. Do we let the tax cuts expire for them or not? President Obama says, yes let them expire for the richest two percent because they can afford the taxes and we need the revenue. The Republicans are saying no, we can’t let taxes go up for anyone, particularly these rich folks are the job creators. We need them to keep the economy going.”

While the proposed hikes are not attractive, cancelling them also creates problems, as the US deficit would grow.

Grover Norquist of Americans for Tax Reform said: “Democrats want a bigger government and they want higher taxes to pay for it. The Republicans want a smaller government and they don’t want to raise taxes to pay for it. What would a compromise look like? There is no compromise. The Republicans want to go west, the Democrats want to go East”.

Euronews Washington correspondent Stefan Grobe reports: “The ugly exchanges over fiscal policies during the campaign are a reminder of the difficult task ahead. Across Washington, lobbyists, think-tank experts and officials at all levels of government are bracing for the year-end battle.”