Larry Summers says IRS provisions are 'grave error'

Former Secretary of State Lawrence Summers has expressed hope that the debt ceiling agreement between President Joe Biden and House Speaker Kevin McCarthy would pass Congress, but he said he is skeptical about the provisions regarding the Internal Revenue Service IRS. I think the IRS provisions are a grave error, he said.

Although the policy policy is different from what he would like, Summers said he is comfortable with the changes in work requirements and spending. I think permitting reform is a policy imperative, he said.

However, the former Treasury Secretary criticized the terms governing the IRS' funding.

The rescinding of IRS funding will raise future deficits by more than $100 billion and could cause a compliance crisis and privileges of rich tax cheats. I desperately hope it will not set a precedent, he said.

The Democrats had included $80 billion to help the IRS hire thousands of employees and improve its technology in the Inflation Reduction Act, according to a report by the New York Times. The debt ceiling agreement, however, would immediately rescind $1.38 billion from the IRS and eventually repurpose another $20 billion from the $80 billion it received.

The economist is not the only one to voice criticism of the IRS regulations. Jason Furman, Harvard professor and prominent economist, had said that the funding reduction is particularly galling especially since it will increase the deficit. It should not be repeated ever again, he said in his tweet.

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