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 This material may not be published, broadcast, rewritten or redistributed.
Tuesday, May 21 2013 10:37 AM EDT2013-05-21 14:37:54 GMT
It's summer swimsuit time-- but is your suit right for your body?
It's summer swimsuit time-- but is your suit right for your body? Whether you're curvy, boxy, or round in the middle, Intimacy Bra fit specialist Eve Turner has some ideas that will help you find that perfect suit.
Tuesday, May 21 2013 10:17 AM EDT2013-05-21 14:17:24 GMT
When it comes to talking to doctors, a lot of us aren't exactly shooting straight. In fact, one survey found that almost 30 percent of patients admit to lying to their physician.
When it comes to talking to doctors, a lot of us aren't exactly shooting straight. In fact, one survey found that almost 30 percent of patients admit to lying to their physician. So, how much does your doctor really need to know?
Tuesday, May 21 2013 9:45 AM EDT2013-05-21 13:45:59 GMT
It's college graduation time, but before many graduates celebrate, they've got to focus on what comes next.
It's college graduation time, but before many graduates celebrate, they've got to focus on what comes next. With a tight job market, many new grads are getting a dose of reality when it comes to trying to land their first job.
Good Day's own Katie Beasley will walk down the aisle this Saturday, leaving her just a few more days to prepare.
Good Day's own Katie Beasley will walk down the aisle this Saturday, leaving her just a few more days to prepare. So, does she have something old, something new, something borrowed and something blue all covered? We found out.
Monday, May 20 2013 11:00 AM EDT2013-05-20 15:00:34 GMT
When the pools open on Memorial Day weekend, it's going to be hard to keep your kids away from the water.
When the pools open on Memorial Day weekend, it's going to be hard to keep your kids away from the water. But before summer gets into full swing, we've got some tips to help you make sure your children stay safe at the pool.
Monday, May 20 2013 9:52 AM EDT2013-05-20 13:52:30 GMT
The nasty divorce between Real Housewives of Atlanta star Portia Stewart and her husband, former NFL star Kordell Stewart, just got nastier.
The nasty divorce between Real Housewives of Atlanta star Portia Stewart and her husband, former NFL star Kordell Stewart, just got nastier. TMZ's Harvey Levin filled us in on the latest on Good Day!
Monday, May 20 2013 9:46 AM EDT2013-05-20 13:46:04 GMT
In case you don't know, we've got a bride-to-be in the house! Good Day's own Katie Beasley is getting married in FIVE SHORT DAYS.
In case you don't know, we've got a bride-to-be in the house! Good Day's own Katie Beasley is getting married in FIVE SHORT DAYS, so we're spending the week checking in with her on the last minute details of her big day!
Monday, May 20 2013 9:32 AM EDT2013-05-20 13:32:48 GMT
Sure, you know that Turner Field is THE place to watch the Braves in action, but did you know you can also take a walk through baseball history while you're there?
Sure, you know that Turner Field is THE place to watch the Braves in action, but did you know you can also take a walk through baseball history while you're there? Good Day's Paul Milliken-- a self-proclaimed Braves baseball addict-- takes you behind the scenes at the Braves Museum.
