NEW YORK (CBSNewYork/AP) – New York State Comptroller Thomas DiNapoli says that if the federal government goes over the ‘fiscal cliff,’ it would mean a big hit in the wallet for Empire State residents.
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If lawmakers in Washington don’t reach a deal by the end of the year, a series of automatic tax hikes and spending cuts will go into effect.
DiNapoli estimates New York residents would be hit with $43 billion in tax hikes and there would be a loss of about $5 billion in federal funding over time for state and local governments.
He said another 3.5 million people would pay the Alternative Minimum Tax, with the average hit in excess of $5,000.
But it’s not just the high end he says. Families with two children at $34,000 in income would pay another $1,000 in taxes with the loss of certain tax credits.
Employers would see a 47 percent increase in payroll taxes.
He says the combination of tax hikes and spending cuts could push the New York economy backward.
“It’s coming at a time when we’re just coming out of the recession, we’re seeing more positive economic numbers than negative, we don’t know what the impact of Hurricane Sandy’s going to be,” DiNapoli said Thursday morning.
President Barack Obama is showcasing a northern Virginia family to highlight his call for extending current tax rates to all but the top 2 percent of earners.
Obama wants to keep up pressure on Republicans as a year-end deadline for avoiding a so-called fiscal cliff of tax increases and spending cuts draws near. He will travel to a Virginia suburb of Washington on Thursday.
Obama spoke with Republican House Speaker John Boehner on Wednesday, signaling the possible start of fresh talks to avoid the fiscal cliff.
Despite the entreaty, Obama is not cutting back on a public campaign to pressure Republicans into accepting rate hikes for wealthier Americans. Republicans say they are willing to raise revenues but want to do it by closing loopholes and limiting deductions on the rich.
Yesterday, Treasury Secretary Tim Geithner told CNBC that the administration will let the across-the-board spending cuts and tax increases take effect as scheduled if Republicans refuse to give in to Obama’s demand to raise tax rates at upper income levels. Sen. Orrin Hatch calls Geithner’s comment “stunning and irresponsible.”
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