By Felecia Bearden – January 18, 2013
George Washington University professor Dr. Tara Sinclair said it best.
“It’s a self-inflicted crisis.”
Sinclair has broken down what problems the US will face in the next two months now that the Senate has voted to raise the debt ceiling and the House will do so next week. This recent decision will increase payroll taxes by at least 2 percent. She said that this increase is only a temporary fix to a long term problem.
“Our economy was weak to begin with,” said Sinclair. “We have two problems going on. And one was that they allowed a payroll tax cut decrease to expire. And in addition we don’t know what our tax bill is going to look like through the remainder of the year.”
The House vote is expected to raise the debt ceiling for only three months. But that bill will require the Senate to vote by spring on a budget containing a great deal of cuts.
The plan is intended to do away with threats of government default. However what all Americans want to know is how this increase will affect them for the upcoming tax season.
“Going to file taxes this season, they are okay because it’s under last year’s tax laws,” said Sinclair. “But when thinking about their budget plans for 2013, I think they need to be real careful about losing this 2 percent income immediately. And with the government making a careful budget and the households making a careful budget. There’s not that much spending going around to simulate the economy.”