Unless you completely unplugged over the holidays, you know that if Democratic and Republican lawmakers could not bridge their differences on how best to reduce the nation's budget deficit and debt, the Budget Control Act of 2011 mandated a combination of spending cuts and tax increases to take effect January 1, 2013. While Washington kicked the can down the road on budget cuts, the cliff was avoided – but what does the deal mean for American entrepreneurs?
There is no doubt that we need to address the $1 trillion-plus annual budget gap. The deadlock was over the solution formula and the relative weight that higher taxes and reduced government spending have in it. This default solution was called the “fiscal cliff” because more than a half-trillion dollars in automatic tax increases and spending cuts would automatically kick-in and studies suggested this default solution would have sent the country back to recession and to higher unemployment. Sales of small businesses already rose in 2012 driven by concerns over the looming fiscal cliff, according to a recent survey by BizBuySell. So clearly, if we avoided a self-inflicted path to recession, despite worries extending beyond the tax code to overall uncertainty, what happened on January 1 was at least in part good for entrepreneurs.
To read the original article: Entrepreneurs and Last Weeks Fiscal Deal - Entrepreneurship.org
