GOP, economists to urge continuation of all Bush tax cuts

“Robust economic growth is best served by a tax code that levies low and predictable rates,” the letter states. “The promise of a tax increase in January 2011 would create significant economic distortions as individuals and businesses conserve capital or stave off hiring.”

Democratic leaders have repeatedly vowed that extending the Bush tax cuts for the middle class is prudent considering the weak economic recovery, but that tax breaks benefiting the wealthy should expire on schedule at the end of the year to help reduce the deficit.

The letter notes that businesses taxed at individual rates would be harmed by this strategy — not just because they would incur higher tax rates, but also because limits on personal exemptions and itemized deductions would also be reinstated.

“Congress should prevent these new burdens from hitting all American families and businesses, as they threaten to undermine an economy still suffering from 9.6 percent unemployment and anemic growth,” the letter states. “If Congress allows heavier taxes on work and investment, we will undoubtedly see less of both at a time they are needed most.”