Larry Summers Wants GOP Tax Plan Raises Red Flags

Former Clinton Treasury Secretary Larry Summers told CNBC on Tuesday he sees a number of red flags in the corporate tax reform proposals emerging from President-elect Donald Trump and House Speaker Paul Ryan.

Ryan met with top Trump advisors Monday to discuss his tax plan, “A Better Way Forward,” which includes calls for lowering corporate tax rates, taxing imports and instituting a territorial approach to end U.S. taxation of foreign profits of American-based companies.
While supporting a lower rate, Summers warned the other measures would cause worldwide pain, such as “potentially a huge spike in the dollar, which disrupts the financial furniture.”

Such a scenario would “cause debt crises in some emerging markets … [and] disrupt the American manufacturing base,” the Democratic economist said on “Squawk Box.”

In a Washington Post op-ed on Sunday, Summers argued the GOP plan would “likely to do significant damage to the tax base and to the U.S. and global economies.”

Reiterating those sentiments on CNBC Tuesday, he acknowledged a reduction in corporate taxes means sense, but “not with a protectionism twist.” There’s no need to overhaul the whole system, he added.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza