| WASHINGTON, July 19
WASHINGTON, July 19 Letting tax rates for the
wealthy rise will not put a short-term damper on the economic
recovery, according to a report by the non-partisan research arm
of the U.S. Congress.
The study by the Congressional Research Service is likely to
be used by Democrats in the looming battle over whether to
extend tax cuts originally enacted during the administration of
President George W. Bush when they expire at the end of the
Republicans want the cuts continued for all income groups
while Democrats favor letting them expire for the most affluent
"If the economy is still weak, a temporary extension (of
all the rates) will not harm the economy," despite adding to the
deficit, the CRS report said, citing CRS economist Thomas
But allowing the rates to rise just for the wealthy could
help "reduce budget deficits in the short term without stifling
the economic recovery."
The non-partisan Congressional Budget Office, a separate
budgetary arm of Congress, has said letting all the tax rates
rise could push the economy back into recession, but it did not
break down the impact of letting the rates expire for different
groups of income earners.