Would Higher Taxes for the Wealthy Help or Hurt the U.S. Economy?

taxes rich
taxes rich

As Congress debates President Barack Obama's proposal to let tax cuts for the wealthy expire at the end of this year, while extending cuts for individuals who make less than $200,000 or households earning less than $250,000, Americans are also divided. Would the economy benefit or suffer if Washington removes the George W. Bush-era tax cuts for the rich?

According to a Pew Research Center poll released Monday, Americans who believe that the expiration of those tax cuts would hurt the economy outnumber those who believe it would help. Approximately 40% of those polled said that expiring top-income-bracket tax cuts would hinder economic recovery, while 26% said that doing so would help the economy, according to the Pew survey of some 1,000 people last week. About a third of those polled either said there would be no effect on the economy or that they didn't know how the economy would respond.

The results seem to contradict the conclusions from another poll that CBS released last week. That survey, which didn't restrict its respondents to considering the economic impacts of the plan, found that 53% of Americans think it's a good idea to let tax cuts for the rich expire, while 38% think it's a bad idea and 8% don't know.

But the results of both polls mirror the discord between President Barack Obama and members of Congress over how best to adjust tax policies -- for both the middle class and the wealthy -- in order to aid an economic recovery. In the Pew survey, Republicans were four times as likely to say that ending the tax breaks would hurt the economy, while Democrats were slightly more apt to say that ending the tax breaks would help the economy. Likewise, in the CBS poll, people also largely responded along party lines: 66% of Democrats said ending the tax cuts is a good idea, while 57% said it's a bad idea.

Additionally, public opinion about which political party is better for the U.S. economy has swung in favor of the Republicans, according to the Pew poll. When asked which party was better at handling the economy, 38% of those polled selected Republicans, while 37% chose Democrats, compared to 42% favoring Democrats and 32% picking Republicans in August 2009, Pew said.

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