Wracked nerves as fiscal cliff looms over horizon - FOX 26 News | MyFoxHouston

Wracked nerves as fiscal cliff looms over horizon

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There is work to be done inside the kitchen at Arturos Uptown Italiano, and cars to be sold at the nearby River Oaks Chrysler Dodge and Jeep dealership.

"Business is absolutely unbelievable," said Jim Lundon.  "We find people come in now at the end of the year trying to get their tax savings, writing trucks off for their businesses.  So business is outstanding."

It sounds like good news for our city's economy but with questions surrounding that so-called "fiscal cliff" still looming over the nation, tax experts like accountant Bob Martin are concerned.

"If you come to my office in January, until they make a decision, I don't know whether we can deduct that sales tax," he said.

It's not just sales tax deductions that are still questionable.  Educational tax breaks that help make college tuition a bit more affordable are also at risk.

"Unfortunately, they expired at the end of 2011," Martin said.  "And most of these benefit lower or middle income tax payers."

"Now, people are nervous again.  They're jittery," said Bill Sadler, owner of Arturo's.  "We have what we call a 'wine index.' When times are good, when people are feeling good about the economy, they come in buy expensive bottles of wine.  When they're not so confident about the economy, they buy less expensive bottles of wine and we're not selling very many expensive bottles of wine right now."

Believe it or not, that's a concern to the men and women who run the Houston Food Bank.  December is usually the biggest fundraising month of the year but right now, donations are down.

The reason:  still more questions over whether charitable donations will be tax exempt.

"We do know many donors are concerned about the end of that deduction, so in the charitable sector we are too," said Brian Greene, Houston Food Bank.  "The speculation is that if there is a capping either total or partial on the charitable deduction, the impact would be anywhere from two to eight percent of giving."

"I will tell you in my whole career, I've never seen such a bottle neck in so many potential negative things happening," Martin said.  "I think we better brace ourselves.  It's gonna be tough for the next few months economically."

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