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Former CBO Director Douglas Holtz-Eakin on the economic consequences of the looming tax hikes.
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Hello everybody I'm Gerri Willis tonight another blow coming to taxpayer's.
Tax would get just four months away.
Congress' inaction may lead to the I arrested delay tax refunds it could happen says the IRS.
It's becoming increasingly doubtful congress will get -- work done on time to prevent a late starts next year's tax season and that could delay refunds for everybody.
Joining me now to discuss this important issue former CBO director Doug Holtz Aiken now the president of American action -- -- always great to CEO.
I for the clock is taking my friends.
-- and it doesn't look like anything's getting done so let's look at the number of days.
Remaining gap -- the senate and the house have before January 176.
And 29 of course they also not gonna do anything until after the election.
That means that we have 26 days in the senate and sixteen days in the house.
To get things fixed what's the likelihood we get anything done and.
At all.
Well I think they absolutely will get something done the question is how soon as you pointed out.
Hi there -- some real problems with the with delaying it the IRS does need time prepare tax forms he needs to send withholding tables to employers.
The software companies need to know what the tax code really will be.
-- -- taxpayers in 2013 making can't prepare and so.
That he of people for example they don't get the AMT fixed we'll see there 3000 dollar -- refunds go away and so well.
-- -- 50 AMT it's -- oh yeah.
-- the -- penalty the death tax the child tax credit capital gains tax on giving it out list here.
Dividend tax payroll tax AMT depreciation.
And I think when he obamacare taxes and total.
Right.
So think about it what do you impacted that imagined that congress isn't able to get anything done which we've seen in the past so it's logical to expect it might happen again.
All these attacks is change go up.
I think the average increase is something along the order of 4000 dollars that's according -- -- Heritage Foundation.
What -- -- what happens to the economy.
And does -- American public finally get fed up with this.
Well certainly they should I mean if if this is allowed to happen if we really do.
Run over the so called fiscal cliff will have a recession in the United States.
I believe we're already seeing the impact of this.
Looming tax increase affecting the economy.
How we're seeing uncertainty on the part of contractors because of the looming spending cuts and so.
As we go through the fall I think that a weak economy is gonna be hurt by this increasingly more and if they absolutely -- to fix it.
Hot it it will not be possible to go back early January somehow undo the damage I think it'll be -- severe shock to become and I think if you.
I've taken at face value we're looking at a pretty serious recession.
You know at what the economy's -- are already growing very very slow late night and -- we have experience with this in 20116.
Point six million tax.
Filings were slowed down stopped in the middle process.
And and that's because again congress was linked.
-- doing the work that they need to get done you know I think the American public is just about had their fill of this.
We look at the congressional ratings out there how well look at the public like you're not a bit.
Ha ha ha if there's any way to get these people would actually do their job.
It's.
I think the key is lies in the senate and in the in the White House quite frankly the house has passed legislation.
Which extends the tax cuts avoiding the tax again it actually replaces the sequester with more sensible long run -- so.
It's done its work on the looming fiscal left at the end of the year the -- done nothing.
I'm one would ask the president and the urge them to do something.
-- -- -- the senate doesn't like the house bill that's fair but until they do their job they can't meet reconcile the differences and actually do.
Avoid the fiscal clips so.
I really think it it's time for the president to lean on his party that controls the senate to get something done because Americans are paying for this and we go over -- They'll pay in a very very deep and lasting way.
Do you see any leadership emerging on this issue are -- any backroom negotiations.
-- conversations.
Between the it's about getting this done.
Sure I mean there are committees that have pieces of the the various side tax components and they're talking about how they can -- get it done but.
Now in the -- we have seen for example Patty Murray senator from it which Washington say.
You know.
We should just run over the fiscal cliff we should raise 440 million dollars for the taxes that'll teach Republicans a lesson and if you got that kind of brinksmanship going on you're not gonna get sensible policies upfront.
We haven't had sensible sensible policies -- long time so that would be a real breakthrough in my view -- thanks for coming on it's always great to see you.
Thank you --
