With the Bush-era tax cuts about to expire, Congress faces a decision with profound consequences for the future of the economy. Unfortunately, the debate is already being overwhelmed by myths, misinformation and partisan politics, a combination that threatens to produce the wrong outcome and leave a majority of taxpayers in the lurch.
Should the cuts be extended, eliminated or modified? The right answer is to keep tax cuts for the middle class -- about 97 percent of all taxpayers -- and let them expire for top earners. That is not a populist, soak-the-rich approach, but rather one that responds to experience and sound economic practice.
Eliminating all the cuts would hurt household budgets at a time when the economy desperately needs more consumer spending. To extend them for everyone -- including individuals earning over $200,000 and families over $250,000 -- would add $700 billion to the hefty deficit over a 10-year period, money that would have to be borrowed from China and other overseas lenders.
But wait, say proponents of keeping the tax rates where they are. Doesn't raising taxes on the wealthy threaten job creation at a time when the unemployment rate is 9.6 percent nationally, and even higher in Florida? Not really.
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