Leading Republicans and business executive are telling the Obama administration that uncertainty over its intentions to either extend or end the Bush tax cuts is damaging the economy. Liberal and conservative Democrats are engaged in a fierce debate over whether to allow rates on upper income households to rise next year. Income taxes haven’t increased yet, but the mere prospect that they will is bad enough, these experts say.
“Right now, America’s employers are afraid to invest in an economy stalled by ‘stimulus’ spending and hamstrung by uncertainty,” House GOP leader Rep. John Boehner said in an economic speech last month in Cleveland,
The Hill reported. “The prospect of higher taxes, stricter rules, and more regulations has employers sitting on their hands.”
The right-leaning National Association of Manufacturers also raised the uncertainty worries in a study the group released this week, according to The Hill. “Uncertainty about looming tax hikes has stunted employment growth and until Main Street begins to hire, the unemployment rate will remain unacceptably high,” the study said.
Tax cuts ushered in by President Bush and a Republican-controlled Congress in 2001 and 2003 are set to expire at the end of the year. So are low tax rates on dividends and capital gains.
President Obama wants to raise taxes on individuals making more than $200,000 and households with incomes above $250,0000. Obama would reinstate the 36 and 39.6 percent rates on upper-income taxpayers. Obama also wants to raise taxes on dividends and capital gains.
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