Locals Worry About Looming Financial Crisis

SANTA BARBARA — The looming financial crisis threatens to boost taxes by more than $500 billion in 2013. The expiring temporary tax provisions will affect 90 percent of Americans. They will pay more if a deal to steer the country away from the fiscal cliff doesn’t come in time. The increase in taxes has many people singing the same tune in downtown Santa Barbara. “That’s gonna hurt,” said Jose Skidmore. “That hurts,” said Toby Nelson. “That’s going to hurt me a lot,” said Steve Nelson. A plan needs to be agreed upon between President Barack Obama and congressional leaders by Monday at the latest. “I don’t really have any confidence in Congress or the president. I don’t think they work together very well and this is just indicative of the whole politics as we have it,” said Brad Burk, Santa Barbara Resident.According to the Tax Policy Center, taxes would rise an average of almost $3,500 per household in 2013. “I’m just still trying to catch up with last years and it’s just been really hard to keep up with that and now that the new ones are coming out, it’s like I don’t know,” said Skidmore. For middle income earners, they would pay an extra $2,000. “For me, that would be a lot. For pretty much anyone in that bracket would be a lot,” said Toby Nelson. Many told KEY News it is money that could be used elsewhere. “I mean it trickles down you know, it’s like are we going to do coffee as much as we do? Maybe not,” said Kimberly Peden, Santa Barbara resident. If the country goes over the fiscal cliff, the effects will affect both high and low income earners. “A lot of businesses and individuals, they’re expecting to have less disposable income because the tax provisions that are sun-setting this year and unless they’re extended into 2013, the tax rates across the board are going to go up,” said Katie Rhew, staff accountant at Bartlett, Pringle & Wolf.