The National Association of Manufacturers (NAM) released a report today estimating that the U.S. economy could lose as much as 12.8 percent in GDP and 6 million jobs over the next three years if Taxmageddon budget negotiations are not resolved. The NAM projects unemployment to rise to over 11 percent under the scenario given and for real disposable income of families to plummet by 10 percent.
Almost as alarming as the potential effects of Taxmageddon are the economic costs sustained thus far because of Washington’s failure to act. According to the report, gridlock in Washington has already cost the economy 0.6 percentage points in GDP growth for 2012 and one million jobs.
With the Republican-led House having passed legislation to avert most of Taxmageddon (as opposed to the Senate’s bill that avoids it on a much smaller scale), it is evident President Obama and Democrats in the Senate are to blame for the uncertainty families and small employers have over a “fiscal cliff” that would raise their taxes by $3,500.
President Obama has made his stance on Taxmageddon known by saying he would veto any bill that did not raise taxes on high-income earners, many of whom are small employers. The President’s threat of veto is grossly partisan and unethical as it holds the financial future of families and small employers captive for political gain.
For a President who has touted ending partisan politics, he is doing more than his fair share of increasing division and gridlock in Congress at the expense of taxpayers.