How The Fiscal Cliff Could Affect Alabamians

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By Ashley Thompson

President Obama cut his holiday vacation short to resume negotiations to try and avoid the Fiscal Cliff.

 

 

We already know taxes will go up for Americans next year but if a deal isn't reached by next week, those taxes may go up tremendously. And Alabamians could feel the worst of it.

We've got just 6 days before we fall off the fiscal cliff. That is if lawmakers in Washington can't strike a deal regarding tax increases and spending cuts. Alabama's struggling economy has slowly been recovering but falling over the fiscal cliff could bring that to a halt.

"We have a delicate recovery and we don't want to see federal benefits slashed and taxes suddenly go up because that could stop our economic recovery and ours is probably more delicate than other states," says AUM Political Science expert Dr. Jeremy Lewis.

Dr. Lewis says Alabamians - who average a household income of just under $43,000 - can't afford to see extreme tax hikes and could face challenging times ahead if no deal is reached.

"Alabamians have below average incomes so we're always people who tend to get hit by changes in federal programs," he says. "We pay less in taxes than the average American. We get more in benefits than the average American so we turn a surplus from the federal government. Alabama gets hit more than many other states." 

Some people we spoke with were anxious about how the tax hikes would affect their bottom line.

"It's going to have an extreme effect on my finances," says Montgomery resident Caleb Lovelace. "It'll effect a whole lot of people and their finances so I'm extremely worried. I hope that they do get something passed."

And others say they are frustrated with the lack of cooperation between lawmakers and would like to see some compromise.

"We're going to hope that Congress can get it together," says resident William Hunt. "Understand that we who are out here don't live in the Washington D.C. bubble and need them to quickly come to a resolution for the benefit of all Americans."

As the fiscal cliff deadline looms, Alabamians continue to be uneasy about their financial future.