A major item on the remaining agenda of the 111th Congress is the extension of some or all of the expiring Bush-era tax cuts. As Congress deliberates, unemployment remains high, job creation is weak, and revenues are scarce. At the same time, emergency federal unemployment benefits are set to expire on November 30, and an estimated 2 million Americans will lose benefits in December (Riordan et al. 2010).
If in the midst of these challenges Congress decides to extend the Bush tax cuts for the wealthy (individuals making above $200,000 or joint-filers making above $250,000 per year) for the next two years, it will be giving $66.8 billion to a group whose incomes have seen the strongest growth over recent decades and who will put relatively little of it back into the economy. At a time when millions are unemployed, revenues are tight, and the economy needs spending that will most improve the economic and budgetary outlook, there are better ways to invest $66.8 billion.