Politics

Over 300 economists counter Obama, say not extending Bush-era tax cuts to wealthier Americans would have ‘deleterious effects’

Jessica Puente Contributor

The National Taxpayer Union released a letter Wednesday signed by more than 300 economists in support of a permanent extension of the Bush-era tax cuts, saying that failure to do so  “would constitute a profound and damaging ‘anti-stimulus’ that would harm our prospects for expansion in the near future.”

“We, the undersigned economists, write in support of extending current tax rates on income and investments in order to prevent a devastating blow to America’s fragile economic recovery,” the letter reads. “Robust economic growth is best served by a tax code that levies low and predictable rates. The promise of a tax increase in January 2011 would create significant economic distortions as individuals and businesses conserve capital or stave off hiring.”

Wednesday afternoon Republican members of the Ways and Means Committee along with National Taxpayers Union Vice President Pete Sepp held a press conference to highlight the letter.

“The Democrats’ plan to increase taxes is bad policy and will only further weaken our economy,” said Ways and Means Committee Ranking Member Dave Camp, Michigan Republican, in a press release.

The letter was meant, in part, to counter a statement President Obama made earlier this month during a press conference. He said economists believe extending the Bush-era tax cuts for wealthy Americans “is probably the worst way to stimulate the economy.” The president only favors extending Bush-era tax cuts for families making under $250,000.

The economists who signed the letter disagree, saying that not extending the tax cuts to wealthier Americans would have “deleterious effects” since “households earning more than $210,000 account for one of every three dollars in consumer outlays.”

“Furthermore,” the letter reads, “businesses directly impacted by upper-bracket tax increases would slow their activities, thereby diminishing economic opportunities for their subcontractors in lower brackets.”

So far, House Republicans and at least 31 House Democrats have called for an extension of Bush-era tax cuts for all income brackets.