Fiscal cliff dilemma angers, worries Rapid City middle class - KOTA Territory News

Fiscal cliff dilemma angers, worries Rapid City middle class

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It was a good idea.

Roughly $1.2 trillion dollars in federal tax hikes and program cuts were supposed to be such a nasty political pill to swallow that congress would finally reach a deal to rein in spending.

But no deal means the country goes over the fiscal cliff.

In KOTA Territory, many wonder how those cuts will impact their wallet.

"From looking at what's happened in the recent past , I'm not too optimistic a deal will be reached," said Rod Seals, Assistant Fire Chief with the Rapid City Fire Department. 

But what's really at stake? The immediate impact will be seen in your paycheck.

"What's at stake is our economy.  We'll all be paying 2% more in our income.  That's about $40 a month. Income tax rates for all of us will increase, between $2000–$3000 over the course of a year," said local economist Don Frankenfeld. 

Experts say going over the fiscal cliff could claim at least three million jobs because of the resulting slow economic climate.

"That could effect Ellsworth . Some of the personnel who are there may be reduced. It puts in jeopardy the very existence of Ellsworth over a period of time," said Frankenfeld.

But those particularly fed up with congress say the cliff may have some positive long term effects when it comes to reducing the deficit.

 "They should let it go and just let it go over. I think it would help reduce the deficit somewhat. What they're doing right now is not good," said Robin Clarke, an Office Manager.

"If we go over the cliff, we take our medicine all at once, there's a danger the medicine will make us even sicker. Being sick means another recession, million unemployed. it's not the thing to do when the economy is already pretty weak," said Frankenfeld.

Instead, Frankenfeld believes other sources of tax revenue need to be discovered.

"Some increase in revenue is essential, that increase may come from increasing tax rates, could come from eliminating tax loop holes. We need more money in the treasury. We need to spend less money," said Frankenfeld.

Frankenfeld says congress will likely pass an extension to delay the issue six months to a year.

For more of the latest facts and figures on the budget crisis and how it impacts South Dakota, check out America on the Edge of the Fiscal Cliff on MyTown.

 

 

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