Deutsche Bank: Letting Bush Tax Cuts Die Would Kill Recovery

[Karmadillo]

http://finance.yahoo.com/news/Letting-Bush-Tax-Cuts-Die-cnbc-55052450.html?x=0&sec=topStories&pos=5&asset=&ccode=

The nascent US economic recovery would be halted in 2011 if Congress fails to extend the Bush tax cuts for the wealthiest Americans, analysts at Deutsche Bank said.

The cuts were enacted in 2001 and 2003 under President George W. Bush and covered those earning more than $250,000, but they are set to expire at the end of this year.

Deutsche said the drag on gross domestic product should they lapse could be as much as 1.5 percent, with the more likely impact at 1.1 percent.

The impact would be worse, the analysts said, if Congress fails to fix the Alternative Minimum Tax, which was enacted in 1969 to make sure rich people pay taxes but was never indexed for inflation, and thus is now hitting middle-income workers.

"In a worst-case scenario, allowing the Bush tax cuts to expire and failing to fix the AMT could result in (1.5 percent) of fiscal drag in 2011 on top of the 1 percent fiscal drag we expect to occur as the Obama fiscal stimulus package unwinds," Deutsche said in a note to clients. "If the recovery remains soft/tentative through early next year, this additional drag could be enough to push the economy to a stalling point."

more...

[joeybee12]

1. From personal experience, those running Deutsche Bank are virtually criminal...

...so it's obvious they need to let the tax cuts expire.

[Blue Owl]

2. So say the anal cysts at Douche Bank

I don't trust anyone advocating the continuation of ANY Bu$h policy.

[MannyGoldstein]

3. Recovery seems about dead already.

I guess we can all pick a reason, then say "see, I told you so" in a few months.

The really impressive people are those, like Paul Krugman, who said a year ago that the efforts taken were likely to fail. Fail for working Americans, in any case.

[Bitwit1234]

4. They're spelling their name wrong it should be

Douche Bank. And besides what good is giving tax breaks to the rich going to do to help this country recover. The average American gets not benefit, the economy gets no benefit. In fact with less taxes the deficit would be higher. But then you have the tea bags, who regardless of the republicans who took the survey and said they were intelligent, are such damn dummies they can't figure that out.

I don't blame people for complaining about taxes, but look at it this way. How would we run the country without taxes. And if they say government is too big let them explain this. THEY LOVE THE WARS, THEY LOVE SUPPORTING THE WARS. Where does that money come from TAXES. And there are a lot of other things in the country they take for granted that are supported by taxes. And if we cut government who in the hell would run this country. The tea bags with their silly hats.

[DFW]

5. Coming from Deutsche Bank

That indicates that it would be the most sound policy decision we could make.

[Statistical]

6. Based on the the theory one should do the exact opposite of what big banks say...

guess that proves tax cuts should expire.

[4lbs]

7. That's a load of bull. The comment from Deutsche Bank that is.

I'm trying to recall when giving tax cuts to the wealthiest ever created jobs or led to any recovery or economic expansion.

Probably because it hasn't.

[onethatcares]

8. let's substitute BCCI for Deutsche Bank

the folks that ran the first just changed addresses. Jeez.

[TheKentuckian]

9. mmm...poppycock

Or at least it is functionally to the perspective of the bottom 95%.

That money hasn't generated almost any jobs and has accompanied the further erosion of broad prosperity.

[bemildred]

10. Are these the guys we had to bail out to keep them from going bankrupt? nt

[FooshIt]

11. fuck the recovery

make the rich pay

[Karenina]

12. SOMEBODY needs to bust these clowns.

:eyes:

[Odin2005]

13. That bunch of NAZIS can go fuck themselves.

[no_hypocrisy]

14. Translated: Clients will have to use their money to pay taxes, not invest in stocks, bonds, and

other fiduciary inventions. And that means less profit for stockholders of Deutsche Bank.

[Juche]

15. Incomes for the wealthy doubled under Bush

It didn't stop the crisis, and we had the worst job growth in 80 years under Bush.

I have heard these arguments before, that raising taxes will kill the recovery. I don't know. What will also kill the recovery is a lack of stability in the economy and a lack of security on the part of consumers and laborers.

Corporations and the wealthy already have more than enough capital. Corporate profits have skyrocketed since 2008, cash reserves are at 2 trillion and the wealthy are still doing better than they were 5 years ago (I believe).

I'm not an economist, so I don't know. But if you can recover the economy by promoting security among laborers rather than supply side tax cuts, go for it.

[Historic NY]

16. Who's recovery, the rich.

[Canuckistanian]

17. I'm sure it WOULD kill the recovery of Deutsche Bank

Less offshoring of wealth tends to be deleterious to banks that are... er, offshore.