Hendricks County Flyer, Avon, IN

Westside

December 18, 2012

Fiscal cliff could have swift, negative impact on Indiana

A Ball State University economist expects the U.S. economy to be in deep recession by summer, if the mandatory tax increases and spending cuts associated with 2011's federal Budget Control Act take effect as scheduled on Jan. 1.

But while those measures may be financially painful for residents, Michael Hicks, Ph.D., says they're also necessary.

"We have to face the $15-and-a-half trillion (federal) budget deficit at some point," he said during a recent phone interview.

The two major revenue changes from the Budget Control Act are the elimination of the Bush tax cuts and the expiration of a 2 percent payroll tax cut for those making less than $110,300 annually. Child deductions are also scheduled to be discontinued.

Because of that, the Tax Foundation estimates Indiana will see a federal tax increase of 5.27 percent - about $3,653 per household. Along with that, state employment is expected to be 1.2 percent lower.

"I think (the effects) of the fiscal cliff, in the short run, will be far sharper," Hicks said, comparing it to other significant legislation in recent memory. "In the long run, the Affordable Care Act may be (more), but in the short it's the fiscal cliff, simply because it's a very large tax increase on households."

There are three ways of dealing with the trillions in debt currently held by the federal government: cut spending, raise taxes, or experience inflation.

"I think we're going to experience all three," Hicks said. "We're going to see a significant tax increase, big spending cuts, and I hope less inflation. That (last one is) an uncontrollable event."

Finding common ground on controlling future government spending would enable tax increases to be unfurled more slowly.

"Unfortunately, that requires a great deal of consensus," Hicks said. "I don't believe we're anywhere near that."

Text Only
Westside
  • Court observers predict 'wide open' process of picking of next chief |INDIANAPOLIS — State Supreme Court Chief Justice Brent Dickson surprised observers in June when he decided to step down after a brief tenure in the leadership post. Another surprise may be in store when his replacement is named. A seven-member pane

    July 29, 2014

  • WSF 7-29 news speedway roundabout pic 2 Speedway breaks ground on Main Street roundabout SPEEDWAY — Just one day after a weekend of bustling activity with the Brickyard 400 race, officials here gathered for the ground breaking of a roundabout project that will eventually connect Main Street, 16th Street and Crawfordsville Road in an atte

    July 29, 2014 2 Photos

  • WSF 7-29 news sackpacks 1 Wayne Township students receive sackpacks Thanks to the Office Depot Foundation and Indiana State Sen. Mike Delph, 200 students at two Metropolitan School District of Wayne Township elementary schools will start the coming school year with new sackpacks filled with supplies. “Because of Sen.

    July 25, 2014 2 Photos

  • Worship briefs Church hosts Back to School Bash Brownsburg Church of the Nazarene is hosting a Back to School Bash from 12:30 to 3 p.m. Aug. 3. Each person gets one meal ticket and one door prize for free. There will be hot dogs, chips, cookies, and drinks, as well

    July 25, 2014

  • State health plan reaches capacity |As of this week, the federal Centers for Medicare and Medicaid Services (CMS) has authorized the Indiana Family and Social Services Administration (FSSA) to stop enrollment into the existing Healthy Indiana Plan (HIP). Enrollment in the current Heal

    July 25, 2014

  • WSF 7-29 biz kings pic 2 [Duplicate] Sports Bar and Grill is family affair CLERMONT — Dave and Pam King have talked about owning a bar and grill for years with their two children, Sarah and Brian. Just this summer, an opportunity came available that the family couldn’t pass up. Long-time residents of the west side of Indian

    July 25, 2014 1 Photo

  • HCF 7-26 biz kings pic Sports Bar and Grill is family affair CLERMONT — Dave and Pam King have talked about owning a bar and grill for years with their two children, Sarah and Brian. Just this summer, an opportunity came available that the family couldn’t pass up. Long-time residents of the west side of Indian

    July 25, 2014 2 Photos

  • WSF 7-22 news wife killer Man in custody for murdering his wife At about 8:11 a.m. Sunday, Indianapolis Metropolitan Police Department (IMPD) officers were sent to 5702 Laurel Hall Drive after a 911 call of a disturbance with a person injured. When officers arrived they found a female inside the house with head

    July 21, 2014 1 Photo

  • WSF 7-15 news fire training 4 [Duplicate] Firefighter recruits train in condemned buildings The classroom heated up this week for firefighter recruits as they moved into the final states of training: live fire.The Wayne Township Fire Department is hosting the training this week at a set of abandoned buildings on the city’s west side.Mike Pr

    July 16, 2014 1 Photo

  • WSF 7-15 news brewery pic 1 Upland Brewery wins awards at Ind. State Fair Brewers' Cup Upland Brewing Company took home all the big awards in the professional division of the Indiana State Fair Brewers’ Cup competition over the weekend.The Bloomington brewery was named Indiana Brewery of the Year and Grand Champion Brewery of the Year.

    July 15, 2014 1 Photo

House Ads
Hendricks County Marquee
Email News Sign Up
Facebook
Twitter Updates
Follow us on twitter
Poll

Should the government continue to use military bases to house illegal immigrant children?

Yes
No
Undecided
     View Results
AP Video
US Ready to Slap New Sanctions on Russia Kerry: Not Worried About Israeli Criticism Boater Rescued From Edge of Kentucky Dam Girl Struck by Plane on Florida Beach Dies Rodents Rampant in Gardens Around Louvre House to Vote on Slimmed-down Bill for Border Looming Demand Could Undercut Flight Safety Raw: 2 Shells Hit Fuel Tank at Gaza Power Plant Raw: Massive Explosions From Airstrikes in Gaza Giant Ketchup Bottle Water Tower Up for Sale Easier Nuclear Construction Promises Fall Short Kerry: Humanitarian Cease-fire Efforts Continue Raw: Corruption Trial Begins for Former Va Gov. The Carbon Trap: US Exports Global Warming Traditional African Dishes Teach Healthy Eating
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Must Read