Tax hike to hurt retailers: White House

Written by Associated Press | Washington | Updated: Nov 27 2012, 08:18am hrs
White House economists warned Monday that the uncertainty of a potential hike in taxes next year for middle-class taxpayers under the looming fiscal cliff could hurt consumer confidence during the crucial Christmas holiday shopping season.

In a new report that coincides with Congress return after the Thanksgiving holiday, the White House says that if lawmakers dont halt the Jan 1 automatic increase on in taxes for households earning less than $250,000, consumers might curtail their shopping in advance.

Across-the-board tax increases and deep spending cuts will take effect, with the possibility of driving the country into another recession, if president Barack Obama and a divided Congress cant reach a deal by the end of the year to avoid them.

As we approach the holiday season, which accounts for close to one-fifth of industry sales, retailers cant afford the threat of tax increases on middle-class families, the report says.