Tags: Larry Summers | Larry Kudlow | Donald Trump | Steven Mnuchin

Larry Summers: Trump's Tax Plan Hurts Credibility of Treasury

By    |   Thursday, 27 Apr 2017 01:52 PM

Larry Summers, the former Treasury secretary in the Clinton administration, said President Donald Trump’s one-page plan to cut taxes hurts the credibility of the U.S. Treasury.

"Most presidential campaigns during the primaries, when they put out a tax plan, they put out more than one page. They put out some analysis, some models, some careful articulation of the proposal and estimate its effects," Summers told CNBC. “There's none of that coming from the administration, and yet there's this confident statement that it will pay for itself. I don't know how they could possibly know without having done economic work."

Trump’s top economic adviser Gary Cohn and Treasury Secretary Steven Mnuchin on Wednesday revealed a plan to slash the federal income-tax rate to 15 percent for corporations, small businesses and partnerships.

The plan, announced as Trump closes in on the 100th day of his presidency, calls for a one-time levy on about $2.6 trillion in U.S. company profits kept in foreign countries, where they avoid double taxation. Most foreign profits would be exempt from U.S. taxes, unlike the current system of taxing company income regardless of the location.

Mnuchin said the tax cuts will generate so much economic growth that they will pay for themselves. Larry Kudlow, the former Reagan adviser who helped the Trump campaign craft its tax plan, said even a conservative estimate of 3 percent economic growth would reap $4 trillion in tax revenue over the next 10 years.

Summers said the tax cuts by the Reagan and George W. Bush administrations didn’t fulfill the promise of paying for themselves.

There is "no serious read of the evidence to suggest that they came close to paying for themselves by stimulating economic growth," Summers said. "I just don't understand what could cause an administration to put its secretary of the Treasury in a position to assert something ... that is generally regarded by economists as absurd."

Summers was an adviser to President Obama, who presided over an economy that never exceeded 3 percent yearly growth even as the Federal Reserve kept interest rates near record lows of zero percent. The U.S. economy has grown by 3.2 percent a year on average since 1947.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
StreetTalk
Larry Summers, the former Treasury secretary in the Clinton administration, said President Donald Trump's one-page plan to cut taxes hurts the credibility of the U.S. Treasury.
Larry Summers, Larry Kudlow, Donald Trump, Steven Mnuchin
364
2017-52-27
Thursday, 27 Apr 2017 01:52 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved