Survey: Higher Taxes, More Spending Cuts Needed

The best way to reduce the federal deficit is through a combination of higher taxes and spending cuts, according to economists recently surveyed by the National Association for Business Economics.

Members of the association said the country needs more fiscal stimulus through 2013. However, by 2014 that stimulus should be throttled back.

A majority of those surveyed favor extending payroll tax cuts, the current marginal income tax rates and the current tax rates for dividends and capital gains for all or most taxpayers through next year.

Respondents were split though on whether deep tax cuts that were passed under President George W. Bush, and which expire at the end of December unless Congress takes action, should be extended for everyone or just households earning less than $250,000 a year.

And some 87% of the economists believe that uncertainty about what direction Congress and the White House will take is holding back the economic recovery.

Narrow majorities of respondents said that current U.S. monetary policy was "about right" (59%) and that quantitative easing already undertaken by the Fed has been a success (53%).

Only 46% of those polled expect that the European Union will have fewer than its current 17 member countries within the next five years. That is down from more than 60% just six months ago.

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