Former Treasury Sec. Larry Summers criticizes Democrats, saying their tax plans will give rich people like him a big cut

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  • Former Treasury Secretary Larry Summers criticized Democrat tax plans.

  • Top earners are "getting a significant tax cut in a Democrats only tax bill" wrote Summers.

  • Democrats have been forced to dramatically scale back tax plans amid opposition from within the party.

Former Treasury Secretary Larry Summers criticised Democrats for what he claimed amounts to a series of tax cuts for the wealthy in President Joe Biden's planned $1.75 trillion social and climate change bill.

Summers in a tweet Sunday criticized the bill for not doing more to close down tax loopholes and extract more from high earners.

The plan as it stands largely retains the tax cuts passed by the Trump administration in 2017 which provoked widespread anger from progressives because it eased taxation on the wealthiest.

"I am certainly no left wing ideologue, but I think something wrong when taxpayers like me, well into the top .1 percent of income distribution, are getting a significant tax cut in a Democrats only tax bill as now looks likely to happen," wrote Summers.

"No rate increases below $10 million, no capital gains increases, no estate tax increases, no major reform of loopholes like carried interest and real estate exchanges but restoration of the state and local deduction explain it."

Summers served as treasury secretary under President Bill Clinton, and as director of the National Economic Council under President Barack Obama.

He has been among the most prominent Democratic critics of Biden's economic policies. Earlier in 2021 he warned that the money the Biden administration was pumping into the economy in the hope of counteracting the effects of the COVID-19 pandemic could fuel inflation.

Insider has contacted the White House for comment on his criticisms.

The Biden administration originally sought to fund is spending plans bill by corporate tax rises and closing tax loopholes for the wealthy, like those Summers outlined in his tweet.

But, amid opposition from Sen. Kyrsten Sinema of Arizona, a Democrat, they scaled back the plans and instead are looking for different ways to fund it.

Democrats plan to use a process called budget reconciliation to pass the bill, which will require the support of all 48 Democratic senators and the two independents who tend to support them.

Securing agreement among the 50 has been a tortuous, months-long process that saw many of the most ambitious elements of Biden's plan dropped. Republicans are expected to to unanimously oppose the measures.

Democrats have been left scrambling to come up with new ways to fund the bill. Potential new funding streams are a new tax on billionaires and the ultra wealthy, and a global minimum corporation tax.

Read the original article on Business Insider