Larry Summers: Ocasio-Cortez 'right in spirit' to call for higher taxes on top earners
Posted January 8, 2019 4:37 p.m. EST
(CNN) — Former Treasury Secretary Larry Summers said Democratic Rep. Alexandria Ocasio-Cortez of New York was "right in spirit" to call for higher taxes on the nation's highest earners.
"The congresswoman is right," Summers told CNN's Christiane Amanpour on Tuesday. "We need more progressive taxes in the United States. The top one percent and the top tenth of a percent and the top hundredth of a percent, they should all be paying more than they are."
Summers said, however, rather than increasing marginal tax rates for those at the top of the income spectrum, he favored closing "loopholes" to beat tax avoidance among the wealthy.
"When you have high tax rates, as we did in the 1960s, it turns out that people take advantage more and more of the loopholes, and you don't actually collect as much money as you're hoping to," Summers said. "So I think she's right in spirit in calling for more progressive taxation, but I think there's room for a very productive conversation about what the right way to do it is."
In a recent interview, Ocasio-Cortez floated increasing marginal tax rates to as high as 70% on top earners in order to fund a plan to tackle climate change dubbed the "Green New Deal."
The call led to further rebukes of the freshman congresswoman from conservatives but has had positive reception from others, including liberal economist Paul Krugman, who praised her comments in a recent column.
Summers led the Treasury Department during the Clinton administration and was a key economic adviser to President Barack Obama. In Tuesday's interview, he said the US needed "more progressive taxes" to ensure more people could pay less for programs like Medicare and Social Security.
He stressed that by eliminating opportunities for people to avoid taxes the government could "raise very substantial amounts of revenue."
"Certainly a trillion dollars over the next 10 years, probably more, from the very top of the income and wealth distribution," Summers said. "And that's what we should do in order to fortify what government does for most of the people who are the bedrock of our country."