Fmr. Obama Econ. Adviser Furman: Raising Corporate Taxes Is ‘Not Really about Inflation,’ Biden’s Claiming Something He Likes Will Help

During an interview aired on Friday’s broadcast of the Fox Business Network’s “WSJ at Large,” Professor of the Practice of Economic Policy at Harvard University and the Harvard Kennedy School Jason Furman, who served as Chairman of the Council of Economic Advisers under President Barack Obama and on the Council of Economic Advisers and the National Economic Council under President Bill Clinton said inflation “way above” the Federal Reserve’s target rate of 2% is going to be around “for a while,” and that President Joe Biden’s claim that raising taxes on corporations will combat inflation is an example of people claiming any idea they like will combat inflation and the plan isn’t really about inflation.

Furman stated, “I think we’re going to be with this for a while, not at 8%. Some of that really is transitory, some of that really is due to Putin’s invasion of Ukraine and won’t continue, but way above the Fed’s 2% target. Because a lot of it’s gotten embedded in wages, which then go to prices, which then go to wages. There are still additional sources of demand in the economy, and we’re seeing inflation shift. It’s going away in goods, but it’s appearing in a big way in services, especially housing.”

Host Gerry Baker asked, “President Biden…tweeted about a week ago, he said this, ‘You want to bring down inflation? Let’s make sure [the wealthiest] corporations pay their fair share.’ Can you explain the link between making corporations pay more in taxes and bringing down inflation?”

Furman answered, “Look, I think there’s room for some recalibration on corporate taxes. … Look, right now, everyone, in every political party, has whatever idea they like, and they say, oh, and by the way, it’ll also lower inflation. I think this — rebalancing the tax system, investing more in children, investing more in education, investing more in climate change, that, to me, is a good idea. It’s not really about inflation, but everyone’s trying to make everything about inflation.”

Follow Ian Hanchett on Twitter @IanHanchett