10:13 am Nov. 30, 2012
Mayor Michael Bloomberg this morning said that all the talk of a "fiscal cliff" is little more than a media marketing gimmick.
"Nothing's gonna happen on January 2," he said during his regular Friday morning appearance on the John Gambling radio show. "The stock market may react poorly. I'm not even sure of that. But there's no cliff. This is just something that plays well on your radio show and in the newspapers."
President Barack Obama and the Republican House don't appear to be any closer to an agreement on how to avoid the huge spending cuts and tax increases that will, absent a compromise, kick in at the start of the year.
Bloomberg today noted that it will take a while for those spending cuts and tax increases to be felt (hence his argument that the "cliff" is more of a slope), but that the danger is real, particularly in the event the federal government reduces charitable contribution and state and local tax deductions.
"If they were to reduce the deductability of state and local taxes, a place like New York would be very severely hurt," said Bloomberg.
(According to Charles Lane in the Washington Post, "Two states, California and New York, reaped almost 30 percent of the deduction’s value in 2009.")
"The other thing is, if they were to eliminate or reduce the ability to deduct charitable contributions," Bloomberg continued. "The federal government and state governments are defunding higher education and even regular education throughout this country. It's a disaster. But it would be so much worse if they couldn't at least turn to private sector people and say, 'Hey, help us here.'"
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