Press TV reports.
“That will help the economy by reducing the deficit because the taxes will go up only on the wealthy. When taxes rise on anybody, it’ll cut the spending or demand; but taxes on the wealthy people will not reduce demand so it’s a good thing for the economy,” said Ravi Batra, a professor at the Southern Methodist University in Texas.
On Monday, Republicans and Democrats reached an agreement to avert the "fiscal cliff" of automatic tax hikes and spending cuts for 2013.
Reports say the agreement would raise taxes on the richest Americans, while exempting others who earn less than USD 450,000 a year. The deal will also put off USD 109 billion in budget cuts for two months.
“I think Americans will be very happy...most of them will avoid paying very high taxes,” Batra said, adding that “if this agreement is not done then on average the customer will have to pay two or three thousand dollars per year more on taxes.”
This comes as the US Treasury Secretary Timothy Geithner said on December 27 that “the country hit its debt ceiling.” America’s debt currently stands at over USD 16 trillion.
A political analyst says the recent US bill aimed at averting the so-called fiscal cliff will benefit the country's economy, while taxing wealthy Americans and sparing the middle-class,