Fiscal Cliff Impacts QC Business - News and Weather For The Quad Cities -

Fiscal Cliff Impacts QC Business

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With time running out to negotiate, many are watching developments out of Washington, D.C. closely, among them small business owners who could see a fall in business with the fiscal cliff. 

The Quad City Chamber of Commerce estimates there are around 20,000 businesses in the QC, about 17,000 of them are independently owned and especially vulnerable to the effects of the fiscal cliff. 

Financial experts are estimating a $290 billion drop in consumer spending if we hit the fiscal cliff, and for small businesses, that means fewer jobs, cutting back hours, and less economic growth.  

"Every time we have a little economic burst, we're doing okay and then all of a sudden now we're hitting this cliff," Business Owner Tami Grady says. 

Grady owns Freddy's Fritters, a dog bakery and pet boutique in the Village of East Davenport. 

As the clock ticks on massive federal tax increases and spending cuts, the average family of four making $75,000 a year is looking at paying about $3,289 more in taxes a year. 

That's $3,289 less they have to spend in stores, like Grady's. 

"It is hard to plan because if we would hit this cliff, I could see us ending up with no business, people not coming in, and they're a nervous wreck about spending money," Grady says. 

Grady says she's planning ahead in case policymakers in Washington don't strike a deal in time. 

"We do have a plan, we will have to lower hours for our employees," she says, "We have to look at the big picture, and that means it might mean extra hours for myself, but it's going to be harder on our employees."

It's not just Grady's business, but most in the QC are all waiting to see what the fiscal cliff means for them. 

"They will likely put of the hiring decision or the expansion decision at the last possible point, until they have as much certainty as they can that they're going to have the resources to manage it," QC Chamber of Commerce CEO and President Tara Barney says. 

Plus business owners could get hit twice with the effects of the fiscal cliff, paying extra taxes at home and making less at work. 

"It's very likely they'll get a double whammy," Barney says. 

The uncertainty surrounding the fiscal cliff is hitting the QC at the worst possible time.  

"We're having some beginnings of growth in the Quad Cities, and to have them be damped down by this lack of good clarity is just stalling our economy when we're at a point in the QC we're really poised for some nice growth," Barney says. 

For business owners and tax payers, it's all a waiting game until December 31st. 

"It's definitely hitting us, people are nervous," Grady says. 

Financial experts predict the cuts will be postponed until 2013 when Congress can get moving on forming a solid tax reform plan. 

If you're wondering how much your family could be impacted by the fiscal cliff, there is a tax calculator here, based on your income and family:

http://www.taxpolicycenter.org/taxcalculator/index.cfm