US fiscal cliff: Deal nowhere in sight

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US fiscal cliff: Deal nowhere in sight

US fiscal cliff: Deal nowhere in sight
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As the US teeters on the edge of the so-called fiscal cliff, the automatic roll-out of tax hikes and budget cuts is just weeks away.

The policies are written into current plans to raise the debt ceiling and need to be renegotiated before January.

Republicans are against tax increases for the rich, while Democrats reject the idea that the hikes would hurt economic growth.

“We need to look at history, our recent history, when it comes to the impact of raising individual rates at the highest income levels. As we saw in the 1990s and 2000s, there is no relationship between lower marginal tax rates for the wealthiest among us and faster economic growth,” said Democrat Senator Bob Casey at a special hearing on Capitol Hill.

As negotiations continue, some Republicans are worried they maybe losing the public’s support over whether the rich should pay more.

But Republican Senator Marco Rubio say it is not the wealthy who feel the pinch from raising taxes:

“The true millionaires and billionaires, they have the best accountants and lawyers in America. Do whatever you want with the tax code, these guys are going to maximise it (avoidance). The people who get crushed is the small S-corporation (small business) owner who cannot afford to do all this jiu-jitsu in the tax code and ends up getting creamed.”

But polls show Americans support the Democrats more on the debt ceiling negotiations, reports Stefan Grobe, our correspondent in Washington:

“If the country falls of the fiscal cliff, the tax rates for the rich go up automatically. That’s why a growing chorus of Republicans is urging House leaders to abandon their staunch opposition to those higher tax rates now and negotiate something in return.”