Economists Call for Tax Cut Extension
Posted by Brian Garst on August 30, 2010
The Wall Street Journal blog Real Time Economics is reporting that a 60% majority of economists surveyed by the National Association for Business Economics say the current rates for capital gains and dividends should not be raised to expire at the end of the year as currently scheduled. A further 22% think the rates should be extended for middle-income payers, but not the wealthy.
At least 60% of economists surveyed by the National Association for Business Economics said lower tax rates on capital gains and dividends should not be allowed to expire as provided under current law. Another 22% said the lower rate on capital gains and dividends should be preserved for middle-income taxpayers, but not for the wealthy.
The findings point to increasing nervousness about the impact the expiration of tax cuts could have on the struggling recovery, as Congress gears up for a fall debate on how to deal with the tax cuts.
…Opinion among economists was a little more evenly divided with regard to the expiration of individual income tax rates. Fifty-four percent of those surveyed by NABE favored extending the current rates, while 33% favor Obama’s plan to let rates rise on the wealthy.
In order to provide the most economic impact, tax rates on capital gains and dividends should remain low – or better yet, be eliminated – for all Americans. As this recent Wall Street Journal correctly points out, “rich people are the most responsive to changes in tax rates.” Thus, it would be a mistake to succumb to class-warfare and narrowly target tax relief. The best course for the economy is to eliminate double taxation on all Americans.
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