Economists: Extend Bush Tax Cuts For Everyone(Flashback)

CNN Money ^ | September 20, 2010 | Chris Isidore

[Son House]

"Extend tax cuts for all income levels and do nothing else," said Sean Snaith, economics professor at the University of Central Florida. "More of the same piecemeal, patchwork policies put forth by this administration will undermine confidence and do little to change the path the economy is on."

But economists surveyed were in broad agreement that the recovery is still too fragile to allow taxes to go up for the 97% of taxpayers not in the top brackets.

"If those tax cuts expire for everybody, we go into a double-dip recession," said Mark Zandi, chief economist of Moody's Analytics.

Zandi and some of the economists calling for an extension of cuts for the wealthy want to phase out the lower rates for those taxpayers after a couple of years to limit the cost to the Treasury.

Higher taxes are generally believed to be a drag on the economy since it leaves consumers and businesses with less money to spend. Those who argue for extending the tax cuts for the wealthy say that raising those tax rates would hit many small businesses and could put a crimp in hiring.

"I would prefer that the tax cuts for the two upper brackets would also be extended, but there is much more spending [that needs to be done] and much more of an economic impact from extending the tax cuts for everybody else," said Dana Johnson of Comerica Bank, one of those who endorsed the Obama plan to let taxes rise on the top earners.

Another five suggested other choices of their own, including taking more steps to stop home foreclosures, reforming the overall tax system, resuming drilling for oil in the Gulf of Mexico and having the Federal Reserve do more to provide credit directly to businesses and consumers.

[Son House]

The economy today is comparatively as anemic or even worse as it was in 2010. All that needs to be done is reforming the overall tax system with

1. a flat tax of 9% gives every tax payer a lower rate, and then put
2. a permanent ban on double digit tax rates and
3. a permanent ban on Congress spending more than 17% of GDP.

[DManA]

A policy of tax cuts accompanied with spending increases is

a. insane.
b. cowardly.

[Son House]

Right on! Pandering to both ends of the spectrum, while failure lurks not far behind.