Fiscal Cliff bill explained | Impact on India | Outsourcing - IT recession 2013 | Warning on Investor
US President Barack Obama signed into law a bill on the so-called fiscal cliff - number of tax increases and spending cuts to reduce its debt load. America’s debt load - which currently stands at $16.4 trillion and counting.
Low-income households are most affected by expiring expansions of the child tax credit and earned income tax credit. Middle-income households are affected most by the payroll tax and income tax. Households at the top income level are most affected by the income tax and the tax increases on unearned income such as capital gains.
Due to Fiscal cliff, major US companies could miss estimates for fourth-quarter earnings led some corporate clients to tighten their Spends which in turn reduce outsourcing. It Could affect IT Companies in India like CTS,TCS,Wipro,HCL,Mahindra Satyam,Infosys where its ¾ th of its revenue is from US.
Experts around the world warned that this fiscal cliff would bring weak US economy in to recession.
Barack Obama cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts.
The bill that would back the United States away from its fiscal cliff awaited President Obama's signature.