The Trump administration’s tax overhaul plan bears little resemblance to the reform efforts of the 1980s and wouldn’t do much to boost U.S. economic growth, former Treasury Secretary Lawrence Summers said.
“This is an effort to cut taxes, principally to cut taxes on business in ways that will benefit a small part of the population and will do very little, in my judgment, for the economy,” Summers, a Harvard professor, said Tuesday in an interview with Bloomberg Television. “The great danger here is that we’re going to have some kind of giveaway that is going to impoverish the public sector with respect to huge challenges that it faces down the road.”
His comments came after National Economic Council Director Gary Cohn said on Friday in an interview with Fox Business Network that participating in tax reform efforts were a “once in a lifetime opportunity.” Summers originally responded in a blog post on his website.
The White House said it will release a final version of President Donald Trump’s tax plan this month as Cohn and Treasury Secretary Steven Mnuchin worked through the summer with congressional leaders, known as the Big Six, to come up with the details. The overhaul is expected to cut corporate and individual taxes, get rid of deductions and simplify the code.
Summers, who led the Treasury during the Clinton administration, said meaningful reform would substantially simplify the tax code, increase incentives for purchasing equipment and encourage companies to bring back cash from overseas.
“I don’t see that developing in the proposals that are under discussion,” he said. “There’s a risk that some of the proposals, like the emphasis on territorial taxation without a global minimum, would operate primarily to encourage more businesses to do more things abroad instead of in the United States.”
Summers has been a vocal critic of the president on everything from trade with China to his budget proposal to science.