Larry Summers on Meet the Press: Taxes

Larry Summers was on Meet the Press this morning.

The way he danced around and parsed words on Obama's tax increases was embarrassing.

I give David Gregory credit for at least pointing out that allowing President Bush's tax cuts to expire IS a tax increase.

Summers, of course, disagreed.

Summers said, "Well, let--I think, I think one, I think one wants to distinguish--respectfully, David--very sharply between a new piece of legislation that raises taxes and simply allowing the laws that were signed into place when the Bush administration was in power and when there was a Republican majority in both houses, simply allowing those laws to play out."

A tax increase by any other name or via any other means is still a tax increase.

Video here.

Transcript

MR. GREGORY: Dr. Summers, Republican critics say--as they had these so-called TEA parties around the country this week to protest tax policy in this administration, Republican critics say they only way you're going to fund these priorities is by raising taxes. One of the organizers of these protests was former Texas congressman Dick Armey. He's going to be on our roundtable discussion coming up here. His views were described in The Washington Post this week, and I'll read it to you: "Armey said the real target of the protestors' ire is not the current tax rate but the much higher one that will be needed to pay for trillions of dollars in financial-sector bailouts; the stimulus package...and Obama's ambitious health-care and education initiatives, which are projected to raise the debt by trillions of dollars more. `There's no way he can do the spending he does and cut taxes for most people.'" Does he have that wrong?

DR. SUMMERS: I think he does. I think he does, David, and, you know, I think the record speaks for itself. What the president's proposed is a tax cut for 95 percent of all Americans. You know, I don't know that much about politics, but I've been surprised by these TEA parties a bit. The president is the one who's proposing cutting taxes on virtually all Americans, so I'm not sure who these TEA parties see as being King George.

MR. GREGORY: But he is raising taxes as well. He's allowing the Bush tax cuts to expire and he wants to increase the marginal rates on, on upper-income Americans.

DR. SUMMERS: Well, let--I think, I think one, I think one wants to distinguish--respectfully, David--very sharply between a new piece of legislation that raises taxes and simply allowing the laws that were signed into place when the Bush administration was in power and when there was a Republican majority in both houses, simply allowing those laws to play out. Yes, the president does believe that it's right to let those laws play out and when the tax cuts expire to allow them to expire, given the magnitude of the debt burdens that, that we face. That seems to him and I think to most Americans to be the right judgment, rather than enabling a benefit that only goes to about 1 percent of the population to leave the children of 100 percent of Americans facing a much larger debt burden.

MR. GREGORY: But, but just to be clear, if there's a tax cut that expires, taxes go up. Might--you know, a lot of Americans' taxes will go up.

DR. SUMMERS: Well, not a lot of Americans. No Americans whose incomes are under $250,000, actually, David. And way under 5 percent of Americans will actually see their tax, will see their taxes go up. And when they go up, they'll still be taxed at lower rates than they were taxed during the 1990s when our economy did, did extraordinarily well. So I find this argument that somehow some huge burden is going to be placed on the economy from carrying through on the Republican Congress' law that leaves taxes where they were in our most prosperous period in history, seems to me to be an argument that isn't the strongest argument in light of the magnitude of the problems we face.

MR. GREGORY: Is the president pledging that he will not raise taxes on anybody paying less than $250,000? I'm sorry, less than--earning less than $250,000?

DR. SUMMERS: President's made, president's made clear what his policy is, and the, and the budget is an articulation of the president's policy, and what it actually does is reduce tax burdens for those making $250,000. And it has contained--the stimulus bill contains a tax cut for 95, 95 percent of all Americans.

MR. GREGORY: And he won't reverse that at any point to fund these priorities?

DR. SUMMERS: I think I've made very clear where the, where the president is and where the president is going. I mean, he's made it completely evident during the presidential campaign and since he took office that the focus is going to be right there on raising the incomes of middle income families.

When Gregory asked point blank if Summers would guarantee that Obama would not reverse his vow to not raise the taxes of those making less than $250,000, Summers gave a non-answer.

"I think I've made very clear where the, where the president is and where the president is going."

We've seen where the president is going and that's the problem.

The tobacco tax is a tax increase that hits people making less than $250,000.

That's a broken promise.

Obama did what he said he wouldn't do.

On September 12, 2008, Barack Obama was in Dover, New Hampshire, on the campaign trail.

OBAMA: And I can make a firm pledge: under my plan, no family making less than $250,000 a year will see any form of tax increase - not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.

That was a lie.

Under the Obama administration, those families earning less than $250,000 will see an increase in their taxes. Period.

If Republicans were still in control, President Bush's tax cuts would most likely not have been allowed to expire. Period.