Former US Treasury Secretary raises taxes to fight inflation

Bloomberg – Lawrence Summers, the former US Treasury Secretary, said Washington is running without a major tool to help the Federal Reserve curb inflation, He urged lawmakers to study the possibility of to raise taxes.

“Fiscal policy makes a big difference,” Summers said on the show. “Wall Street Week” On Bloomberg TV with David Westin. “The thing to do is raise taxes right now to take some demand out of the economy.”

the summer He said no tax increases should be used to fund new spending, unlike the higher tax package and expanded social investment that President Joe Biden has requested from Congress for more than a year.

“This is not the time for any new big spending program,” said Summers, a Harvard professor and paid contributor to Bloomberg Television. He also rejected “stimulant” measures such as the continued freezing of student debt.

Talks aimed at a microcosm of Biden’s economic platform stalled on Capitol Hill as Democratic Senator Joe Manchin of West Virginia again voiced his opposition.

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Manchin told reporters this month that inflation of 9.1% in the year to June had made him cautious about planning for climate taxes and spending, as that could “inflame” the situation.

“I hope we can get past this basically ridiculous economic notion that tax increases are inflationary — it just isn’t true,” Summers said.

Summers urged action to increase corporate tax revenue, warning against failing to comply with US commitments in the global corporate tax deal negotiated last year by Treasury Secretary Janet Yellen.

“We can significantly increase revenue by reducing corporate tax loopholes,” Summers said. “If we don’t, we could potentially lose what I think is a great achievement of the Biden administration,” he said. He said referring to the global agreement.

The former Treasury secretary also said raising taxes on wealthy Americans would help on the inflation front by containing spending.

“We can generate significant revenue” by “taking some money away from the high income tax evaders who then go and spend the money, and that will help reduce inflation,” Summers said.

Assisted by Eric Wasson.