Gerlach: Raising Taxes Would Cut Jobs

It is one of the hotly debated issues of this presidential election year. Should taxes be raised on the so-called rich?

Congressman Jim Gerlach (R-PA6) has sent an email to constituents, which is also posted here on his website,  stating his opposition to any tax increases, and citing a new report by the accounting firm Ernst & Young that Gerlach says indicates that "raising the top tax rates next year would cost 710,000 Americans their jobs and shrink the paychecks of workers by 1.8 percent."

According to the Gerlach newsletter and website posting:

The study examined what would happen if some of the tax cuts enacted in 2001 and 2003 -- and extended for two years by President Obama in 2010 -- were allowed to expire. The President and some Democrat leaders in Congress want to return to the higher tax rates for those earning $250,000 per year. 

If the tax cuts are allowed to expire, the top rate on ordinary income will climb to 40.9 percent from 35 percent; the top rate on dividends will jump to 44.7 percent from 15 percent; and the top rate on capital gains will grow to 24.7 percent from 15 percent.

"This report finds that these higher marginal tax rates will result in a smaller economy, fewer jobs, less investment and lower wages," researchers wrote. "Specifically, this report finds that the higher tax rates will have significant adverse economic effects in the long-run: lowering output, employment, investment, the capital stock and real after-tax wages when the resulting revenue is used to finance additional government spending."

Read the full Ernst & Young study here.

In the coming weeks, House Republicans are expected to vote on a plan that would stop any tax hike and keep rates as low as possible for all taxpayers.

Just two years ago when President Obama signed into law a two-year extension of the 2001 and 2003 tax cuts for everyone, he said: "You don't raise taxes in a recession, which is why we haven't and why we've instead cut taxes..."

What do YOU think?

Should people (including many small business owners) be required to pay higher federal taxes or would raising ANY taxes be bad for the economy in the current economic climate?

Tell us in the comments section at the bottom of this article.