Will Taxing the Rich Deepen the Recession? – The “Fiscal Cliff” is a Scam- James K. Galbraith – TRNN

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James Galbraith: Long term higher taxes on rich will have little affect on economy; higher taxes for ordinary people could deepen recession over time but there is no emergency


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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore.

We’re continuing our series of interviews asking the question is the fiscal cliff a scam? And the man who says so is Professor James K. Galbraith. He joins us now. He teaches at the LBJ School of Public Affairs at the University of Texas at Austin, author of The Predator State and Inequality and Instability: A Study of the World Economy Just Before the Great Crisis. Thanks for joining us again, James.
PROF. JAMES K. GALBRAITH, LBJ SCHOOL OF PUBLIC AFFAIRS, UT AUSTIN: My pleasure.
JAY: So point four and point five of your six reasons have to do with the tax increases that are scheduled to take place at the beginning of the next year, and we’re told this will be terrible. Do you think so?
GALBRAITH: Well, if the tax increases on the broad middle class were to stay fully in effect for six months or a year, that’s going to crimp people’s budgets, and so I think that’s something that should be avoided. But if the decision to restore those lower tax rates happens in mid-January, end of January, mid-February, the effect will be minimal. I think it probably will not even be perceptible in the data, ’cause people will simply go on spending what they were expecting to spend in anticipation that the Congress is going to act. And that’s, I think, a very reasonable thing for people to expect.

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