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White House: Tax hike threat could hurt retailers

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FILE: Nov. 14, 2012: President Obama gesturing while answering a question during a news conference in the East Room of the White House. (AP)

White House economists warn that the uncertainty of a potential hike in taxes next year for middle class taxpayers under the looming fiscal cliff could hurt consumer confidence during the crucial holiday shopping season.

In a report Monday that coincides with Congress' return after the Thanksgiving holiday, a White House report says that if lawmakers don't halt the automatic increase in taxes for households earning less than $250,000 in the coming days, consumers might even curtail their shopping during the current holiday season.

The report by President Barack Obama's National Economic Council and his Council of Economic Advisers also says a sudden increase in taxes for middle-income taxpayers would reduce consumer spending in 2013 by nearly $200 billion. They say that would significantly slow the economic recovery.