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 This material may not be published, broadcast, rewritten or redistributed.
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.
Monday, May 20 2013 8:25 AM EDT2013-05-20 12:25:27 GMT
It's the time of year when high school students are graduating and getting ready to begin their college years.
It's the time of year when high school students are graduating and getting ready to begin their college years. Twelve Gwinnett County seniors honored with the prestigious Gates Millennium Scholarship will go to college for free, and five of them are from Mountain View High School.
Sunday, May 19 2013 7:55 PM EDT2013-05-19 23:55:43 GMT
Throughout the month of May, Good Day Atlanta will be featuring an app each day!
Throughout the month of May, Good Day Atlanta will be featuring an app each day! FOX Consumer Reporter Steve Noviello thinks you will find these apps useful, and perhaps you'll even save a buck or two!
Friday, May 17 2013 6:31 PM EDT2013-05-17 22:31:42 GMT
For decades, Atlantans have woken up to Tom Sullivan on their radios. But you might not know that he's also somewhat of an expert eBay seller, and he's got quite a story to tell.
For decades, Atlantans have woken up to Tom Sullivan on their radios. But you might not know that he's also somewhat of an expert eBay seller, and he's got quite a story to tell.
