Tag Archives: Fiscal policy

IT industry could be blindsided by fiscal cliff

Cliff house Giant Camera

Cliff house Giant Camera
(Photo credit: davidyuweb)

By Colin Neagle – As Congress continues to debate how it should prevent the federal government and national economy from plummeting off the so-called fiscal cliff at the end of the year, many technology companies – particularly smaller businesses and startups – may be unprepared for the ensuing changes.

Unfortunately for them, it may be too late to do anything about it.

For IT businesses, the fiscal cliff could mean higher taxes on research and experimentation than were imposed prior to 2011, a $114,000 decrease in tax provisions allowing small businesses to write off asset-related expenses, and the disappearance of a bonus first-year depreciation on expenses that stood at 100% as recently as 2011. More information on the impact of the fiscal cliff policy changes on the IT industry is available here. more> http://tinyurl.com/bydfghk


CONGRESS WATCH How Does CBO Model the Response of Labor Supply to Changes in Tax and Spending Policies? Review of Estimates of the Frisch Elasticity of Labor Supply: Working Paper 2012-13 A Review of Recent Research on Labor Supply Elasticities: … Continue reading

Key fiscal questions nominees must answer

By David M. Walker – We can only hope the final presidential debate Monday provides less heat and more light than the previous two. Especially with regard to fiscal matters, the debates have so far not provided the substance and solutions that voters need and deserve to hear.

Neither candidate, for example, has defined a clear goal for their overall fiscal policy. What do they plan to do and when? Will they reduce the budget deficit by a stated percentage, or reduce debt as a percentage of the economy? If so, to what level and by what year? A clearly defined goal can provide a mandate for action.

Extraordinary presidential leadership and bipartisan cooperation will be required if we expect to avoid a U.S. debt crisis. more> http://tinyurl.com/8z2paz4

For euro zone, the heat is on

By Noah Barkin – The euro zone crisis seemed to vanish from the headlines for a brief moment as 2011 ticked over into 2012, but it is about to return with a vengeance.

After years of frustration with the French president‘s shoot-from-the-hip style, government officials in Berlin say they are now worried about the end of “Merkozy,” the most important relationship in Europe, in the middle of the crisis.

“In the current market environment there is no room for using a Keynesian-type expansionary fiscal policy to boost demand in countries with low growth – the markets will simply not accept such a strategy,” Deutsche Bank said in a confidential note on the crisis prepared for the German government late last year. more> http://tinyurl.com/6rj64kz