A new analysis by President Obama’s Council of Economic Advisers (CEA) concludes that going over the “fiscal cliff” could slow the growth of real GDP in Minnesota by 1.3 percentage points if current tax cuts expire for the middle class.
The state-by-state analyses were released by the White House Wednesday as part of Obama’s nationwide campaign to win public support for his plan to raise taxes on income above $250,000.
The report suggests that consumers in Minnesota could spend nearly $3.6 billion less than they otherwise would in 2013 just because of higher taxes. A critical part of the economy that might be squeezed is retail, a sector that employs 278,700 people in the state.
A typical Minnesota family of four (earning $86,000) could see its income taxes rise by $2,200. But the White House says that the 98 percent of Minnesota families who make less than $250,000 a year and would not see an income tax increase under the president’s plan.