Newspaper article St Louis Post-Dispatch (MO)

Questions Loom for Industry Here

Newspaper article St Louis Post-Dispatch (MO)

Questions Loom for Industry Here

Article excerpt

Tuesday nights deal in Congress to resolve the so-called fiscal cliff has many taxpayers, investors and business people relieved, even if it leaves big questions on the table for major St. Louis industries, from health research to fighter jets.

The agreement ended months of warnings over a potentially devastating combination of tax hikes and federal spending cuts. It leaves tax rates unchanged for all but the very wealthiest Americans, though it also ends a short-term tax break that has saved the typical St. Louis family more than $1,000 each of the last two years.

To many, as important as the details was the fact that a deal was done at all. And Wall Street celebrated the news of newfound certainty with a rally that sent the S&P 500 up 2.5 percent Wednesday.

We effectively averted what Id call political-economic suicide, said Benjamin Ola Akande, dean of the business school at Webster University.

Many business owners had been approaching the new year with trepidation, unsure of what their tax rates would be and how to plan.

Now rates will go up on some, but at least they know what those rates will be, said Todd Sivia, an Edwardsville attorney who specializes in estate planning and small-business law.

With unrelated changes coming in health care, the picture isnt completely clear, but its a lot clearer than it was on Monday.

This gives us a pair of glasses to wear, Sivia said. We can see a little better. But I dont know if our prescription is totally clear.

Another thing thats still blurry: sequestration. The 2011 law that set up the fiscal cliff also mandated $109 billion a year in budget cuts, split evenly between defense and other domestic spending, to take effect Jan. 1. In its votes Tuesday, Congress essentially punted those for two months.

If those cuts roughly 10 percent of defense spending and a bit less for programs that fund everything from highways to health research happen, they could crunch revenue for companies that rely on government contracts, especially in a place such as St. Louis, which has an unusually large defense industry.

From Boeing Co. and Scott Air Force Base to small aerospace suppliers, 26 percent of the St. …

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