MOST AMERICANS WANT AN END TO BUSH TAX CUTS FOR THE WEALTHY

(Click on chart for larger view)

Note to lawmakers: It’s the economy, stupid.

Most Americans support ending Bush tax cuts for the wealthy. A new CBS News poll finds that a majority of Americans, 56 percent, say the tax cuts for the wealthy should expire for households earning more than $250,000 per year, as Democrats have proposed. Thirty-six percent of Americans say they should not be allowed to expire.

Lower GDP offers more reason for Congress to act. Jeff Bivens at the Economic Policy Institute (EPI) outlines the ramifications behind today’s revisions to estimates of gross domestic product (GDP). The new data revised the GDP downward for the second quarter to 1.6 percent from an initial estimate of 2.4 percent.

Bivens says this downward revision shows without the stream of spending provided by the Recovery Act, the economy would have contracted outright. This is most troubling, as Recovery Act money is almost spent and will provide no boost to growth going forward. The case for more action from policymakers to support the recovery and return the job-market to health is now overwhelming.

And a final word (or two): Income inequality. Raghuram Rajan, professor of finance at Chicago’s Booth School, pinpoints the underlying symptom of the nation’s sputtering economic recovery. 

He says, "Many causes have been suggested for both the economic collapse and mediocre recovery, but one that is hardly ever mentioned is income inequality. This is a mistake. Growing income inequality in the United States and the policy responses it has spawned have done tremendous damage to our economy. And because we continue to ignore this underlying problem, the risks of our policies leading to another calamity will not go away, no matter what we do to reform the financial sector."

Image at left explains what has happened since the Bush tax cuts for the wealthy were inacted. According to the Levy Institute, the bottom 80 percent of the U.S. population own approximately 12.3 percent of the total assets.


-AFL-CIO Blog  reporting by Tula Connell