The recent election in the US left the Democratic party in control of the White House, while leaving the Senate to the Republican party. This division of the political system leaves a division in theories of how to run the economy. Republicans traditionally support lower taxes and less equality while the Democrats tend to favour more taxes for the rich, and less for the poor.
Tax cuts in place from the Bush administration are set to expire at the end of this year, leaving retail companies across North America to wonder, will taxes be hiked considerably and ultimately effect my business? Investors are left to wonder whether consumers will protect themselves this holiday season by cutting their spending on presents for loved ones. The traditional “Christmas Season,” at least among retail stores, launches Friday morning, following US Thanksgiving.
Many well informed consumers will cut their spending if a deal is not reached in the next few days. Black Friday, at least at my place of work at Park Royal Shopping Centre, is a massive time for profits. Ultimately, if a deal is not reached, the struggling world economy will be plunged back into recession. Consumers will protect themselves from such an event, and will cut their spending accordingly. I predict that stores will see large hits in sales, especially on the East Coast of the US as their are so many people that are well informed about the economic situation.
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