Bernanke says big tax hike now would hurt consumer

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday that a large tax increase in the current climate would be a drag on the U.S. consumer.

"In the current environment where consumers are under a lot of pressure and the economy is slowing down, a tax increase that was a significant fraction of a percent of GDP (Gross Domestic Product), for example, would be a drag on the consumer," Bernanke told the U.S. House of Representatives' Financial Services Committee.

Bernanke said low taxes are generally positive for the economy, but tax policy must be balanced against government spending needs.

(Reporting by Emily Kaiser; Editing by James Dalgleish)