Larry Summers ‘Appalled’ At Special Interest Tax Carve-Outs In Democrat Bill

Former Treasury Secretary Larry Summers says he’s “appalled” by the special interest carve-outs in the Democrats’ recent tax-and-climat bill, which he says threatens a historic international agreement.

“I am pretty cynical, and hardly antibusiness in general, or private equity in particular,” Summers tweeted on Monday, “but I am appalled by the end stages of the Senate bill’s passage.”

“It makes me despair of the general interest above the special interest,” he added.

There is no legitimate public policy argument for the maintenance of carried interest or @SenJohnThune /@SenatorSinema‘s private equity carve out from the bill. It makes me despair of the general interest above the special interest.

— Lawrence H. Summers (@LHSummers) August 8, 2022

Then, in a Wednesday appearance on Bloomberg Television‘s “Wall Street Week,” Summers said “It’s very sad how much special-interest lobbyists were able to stop things that are clearly in the public interest,” adding “I am pretty offended by what’s happened here” when it comes to businesses fighting against tax provisions in the legislation.

Summers also blasted the removal of a proposal to scale back the so-called carried-interest tax break, which lets investment managers use a lower rate than for regular income, an advantage Summers called “outrageous.” -Bloomberg

“Even more unfortunate,” he continued, is that the Inflation Reduction Act, lacked steps to put the US in compliance with an international agreement for a 15% corporate tax, which was negotiated by Treasury Secretary Janet Yellen.

“That’s probably going to collapse now, or may well collapse, because Congress wouldn’t pass the enabling legislation by going after tax havens,” Summers said.

That said, Summers praised the overall bill, which he says marks “the first major legislation taking on climate change as an economic strategic priority.”

As far as the economy goes, Summers says we have a “very serious inflation problem.”

Former Clinton Treasury Sec. Larry Summers: “We have a very serious inflation problem”

“We’re likely to have some quite turbulent times ahead” pic.twitter.com/luFbaIXHiW

— RNC Research (@RNCResearch) August 10, 2022