“No income earner will be unscathed,” states the Heritage Foundation in a new study released Monday, if tax cuts for wage earners making more than $250,000 annually expire this year.
The Bush-era tax cuts, which included relief for taxpayers across the board, are set to expire Dec. 31, and Congress is poised to debate whether to extend that relief for just the middle class, as Democrats have suggested.
In a live chat hosted by Heritage on Monday to tout the study, Bill Beach, the director of the Center for Data Analysis at the think-tank, said, “Millions of people at incomes below $250,000 will be affected … Those are jobs that young and lower-income workers want to have that won’t be there if President Obama and the Democrat leadership in Congress get their way in Congress. In addition, families everywhere will lose income that otherwise could have had.”
Read the study, titled, “Obama Tax Hikes: The Economic and Fiscal Effects.”
According to the report, letting the tax cuts expire would lead to slower economic growth and less job creation over the next 10 years, as employment would fall by an average of 693,000 jobs per year. “In other words, for Americans who are unemployed now, their prospects of employment would worsen under the Obama tax plan,” the report states.
“Those who will be most burdened if this plan becomes law are the millions of Americans just starting their economic lives and the millions more trying to find work after the worst recession in 60 years,” says the report. “The rest, whose lives are affected by the investments and business decisions of those taxpayers in the high-income classes, will share the burden. No income earner will be unscathed.”
In the report, Heritage offers the alternative that, “Instead of extracting more income from the private economy, Congress should immediately reduce its spending and enact fundamental entitlement reform that supports strong economic growth.”
On Monday, Obama reiterated his stance for allowing the tax cuts to expire for the top 2 percent wage earners, saying, “The first thing you do when you’re in a hole is not dig it deeper.” He argued that the government “can’t give $700 billion away to some of America’s wealthiest people” and still pay down the deficit.