BUSINESS
11/08/2012 03:19 pm ET Updated Jan 08, 2013

Raising Taxes On Rich Won't Hurt Economic Growth, CBO Says

WASHINGTON, Nov 8 (Reuters) - Allowing income tax rates to rise for wealthy Americans would not hurt U.S. economic growth much in 2013 if Congress extends expiring tax rates on lower income levels, the Congressional Budget Office said on Thursday.

In a report expected to fuel Democrats' post-election demands for higher taxes on the rich, the CBO said extending all of the Bush-era tax cuts, along with changes to the Alternative Minimum Tax, would boost U.S. gross domestic product growth by 1.5 percentage points, compared to letting these rates snap back to prior levels.

If the tax rates were extended only for individuals earning less than $200,000 and couples earnings less than $250,000, CBO said growth would rise by 1.25 percent -- just a quarter point less than extending all of the cuts.

PHOTO GALLERIES
5 Charts On The Bush Tax Cuts