US should raise taxes to help fix deficits, say business economists
US deficit-taming strategy should include boosting tax revenue, say a big majority of 250 business economists in the private sector. Their views, per a new survey, are at odds with GOP's position.
At a time when Republicans in Congress are digging in their heels against raising more federal tax revenue, private-sector economists are sending an opposite signal in a new poll.
Some three-quarters of economists who do forecasting for the private sector say tax revenue should rise as part of efforts to tame unsustainable budget deficits, according to the survey released Monday by the National Association for Business Economics (NABE).
By contrast, 19 percent said tax reform should be done in a "revenue-neutral" way, and 5 percent said reforms should reduce tax revenues. About 250 business economists participated in the NABE survey.
In recent high-stakes negotiations in Congress to raise the national debt limit and reduce future US deficits, most Republican lawmakers said they will not support deficit-reduction plans that raise new tax revenue. The fix, they argue, should come wholly through spending cuts.
By contrast, the economists in the NABE survey, conducted the two weeks just before Washington's Aug. 2 achievement of a debt deal, took a more complex and centrist view of the nation's fiscal problems. While many of them favored spending cuts, a majority argued that the challenge of federal deficits stems from low tax revenue and the recession's after-effects, as well as from untamed spending habits.
That helps explain why many economists support the idea of tax reform that enhances federal revenues – as was also favored by President Obama's bipartisan fiscal commission. Among survey respondents who wanted to see both spending cuts and tax increases, 44 percent preferred a package based primarily on spending cuts, according to Monday's NABE report. Some 37 percent said fiscal reforms should use equal parts spending cuts and tax increases.