Tax Rise Would Cut Output 1.3%

Chamber study also shows tax change could cause loss of 710,000 U.S. jobs.

The U.S. would lose 710,000 jobs and economic output would decline by 1.3 percent, or $200 billion, if tax cuts for high earners are allowed to lapse, said a report prepared for the U.S. Chamber of Commerce and other supporters of the tax breaks.

The study by Ernst & Young LLP supports Republican efforts to extend all of the George W. Bush-era tax cuts set to expire at the end of the year. President Barack Obama called on Congress last week to pass a one-year extension of tax cuts for married couples making less than $250,000 a year while letting rates rise for higher earners.

‘Ignoring the Benefits’

In a post on the White House website, Amy Brundage, a spokeswoman, said the study “fallaciously assumes that the tax cuts are used to finance additional spending, ignoring the benefits of what the president actually proposed, which was to use the revenue as part of a balanced plan to reduce the deficit and stabilize the debt.”

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