High-income tax cuts have little effect on economy

[Joanne98]

by Eileen Connelly

The contentious midterm election is over, but before the new class of lawmakers takes office next year, the current Congress still has unfinished business to address in the coming weeks.


Tax cuts enacted in 2001 and 2003 will end next year unless Congress acts. Lawmakers also have to decide whether to extend emergency unemployment benefits that are set to expire at the end of this month.

Some members of Congress favor extending the tax cuts temporarily for all taxpayers — upper-earners and middle-class families. Others say the nation can ill afford the extension of these tax cuts at a time of record deficits. The best solution for most Americans and our economy lies somewhere in between these two extremes.

In an ideal world — where the United States is running a budget surplus, working families are doing just fine, unemployment is low and the economy is booming — maybe Congress could responsibly extend tax cuts for everyone. But the nation is still recovering from the worst recession in decades amid record-high unemployment.

It would be far wiser to extend the tax cuts for working and middle-class families while allowing them to expire for the top 2 percent wealthiest earners — those earning more than $200,000 a year and families with incomes in excess of $250,000. These earners will still enjoy the middle-class tax cuts on their incomes up to the $200,000/$250,000 threshold. It’s only after that point that they will pay the higher rate.

Extending the tax cuts on those top-dollar earnings, as some favor, is costly and will yield little economic benefit. Through the next decade, it also would add $700 billion to the federal deficit, jeopardizing the nation’s long-term fiscal health.

Investing some of that money in emergency unemployment benefits will generate much more immediate economic dividends. Jobless Americans are more likely to boost a sluggish economy by spending unemployment benefits on their mortgages, utility bills, groceries and prescription drugs. Wealthy earners, by contrast, are more likely to sit on part or all of their tax cut windfall.

http://www.pennlive.com/editorials/index.ssf/2010/11/high-income_tax_cuts_have_litt.html

[rzemanfl]

1. Here's the effect it had here. The folks who got $26K+ extra in

income decided the best way to invest it was to buy Florida condos on spec-a lot of them made big bucks selling them to people who couldn't afford them. They are mostly empty now.

[DesertFlower]

2. i heard that if you make 1.4 million you save

$83,000 in taxes. most people don't even make that much.

[USAFDem78]

3. Maybe if the "tea-tards".....

.....open their eyes and expand their narrow minds, then they'll get this! :)

[Moostache]

4. END ALL TAX CUTS - WIPE BUSH FROM MEMORY AND LET HISTORY JUDGE HIS SOUL.

We need to balance the budget and retire the debt?

Easy-peasy! End the wars, cancel the TSA, eliminate the tax cuts and negotiate the drug rates for Medicare.
Done and done.

[Name removed]

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