Tax breaks for the super-rich might be great for the super-rich. They just don’t do much for the rest of us.
Extending the Bush-era tax cuts for the rich would would boost the economy by an almost negligible amount, according to a recent analysis from the left-leaning Economic Policy Institute -- far less for GDP growth than continuing stimulus measures. Letting the tax cuts expire wouldn't hurt job growth either, according to data from a University of California at Berkeley economist, cited by Mother Jones.
The findings echo those of a similar Congressional Budget Office report last month, which found that the Bush-era tax cuts will cost the U.S. $1 trillion over the next decade.
Though many wealthy Americans, and some Republicans, insist that tax cuts for the rich help the economy, Ronald Reagan’s chief economics adviser found that the economic recovery during that presidency had little to do with the administration’s tax cuts, according to Businessweek.
The findings come as President Obama and other critics have accused Republican nominee Mitt Romney’s tax proposal of favoring wealthy taxpayers at the expense of the middle class. Romney, who is a millionaire, recently defended his low tax rate, arguing that most of his income comes from capital gains, which should be taxed at a lower rate in order to spur investment.
Obama called for a one-year extension of the Bush-era tax cuts -- but only for those making $250,000 or less -- earlier this year. A proposal that Republicans shot down.
In addition to their overall tax rates, there’s a more specific tax break the super-rich are hoping to preserve -- taxes on charitable giving. More than half of billionaires gathered at a recent Forbes summit said that tax policies affect their charitable giving, according to CNBC. President Obama has proposed putting a cap on deductions on charitable giving for those making more than $250,000.