“Since his nomination, Dr. Bernanke has been hailed as one of our most distinguished thinkers when it comes to economic policy and growth,” said Lackritz. “Just last week when testifying before Congress, he praised tax reforms on capital gains and dividends as helping spur economic growth and he emphasized that delay of their extension could have a negative impact on our economy.”
In his prepared testimony before the House Joint Economic Committee, Dr. Bernanke said:
Additional tax legislation passed in 2002 and 2003 provided incentives for businesses to expand their capital investments and reduce the cost of capital by lowering the tax rates on dividends and capital gains.
Together with the appropriate monetary policies, these policy actions helped spur economic growth in both the short run and the long run. Today the U.S. economy is in the midst of a strong and sustainable economic expansion.
In addition, Market News International reported from the same hearing:
Bernanke said that if the Congress were to delay taking action on extending or making permanent the Bush administration’s dividend and capital gains tax cuts it could negatively affect the economy.
“There would be an increase in uncertainty and there may be some impact on growth,” he said, adding that the uncertainty and delay “would be costly in the sense that investors would not know what to anticipate.”
