Higher taxes could encourage racism and anti-semitism???

If there is an annual award for the "Tweet of the Year", then this by Lawrence Summers should make it to the list. In a series of tweets, Summers throws aside all pretensions and declares his allegiance. Sample this,

Forcing the wealthy to spend could boomerang. If the wealth tax had been in place a century ago, we would have had more anti-semitism from Henry Ford and a smaller Ford Foundation today.

And this,

Very few of the problems today involve personal contributions of the wealthy. They instead involve corporate contributions or large groups: e.g., the NRA, the insurance industry, sugar producers...

See the responses on the tweet thread itself. Even an apologetic Paul Krugman cannot take it.

And this,

Wealth inequality is a highly problematic basis for judging a society. Consider a country that put in place super effective social insurance against retirement, disability & health expenses. Middle class people would run their “standby assets” down & wealth inequality would go up

In fact do read the whole tweet thread. It is an exercise in mendacity.

The whole tweet storm is triggered by what appears to have been a very good event at PIIE where Summers had a panel discussion with Emmanuel Saez. 

The larger point that Saez-Zucman make about the need for higher taxes and redistribution to lower inequality is being detracted from by the quibbling over the implementation challenges of a specific set of proposals (never mind the numerous acceptable variations possible, even if the specific set was not feasible). Incidentally, the same Summers was at the forefront of the attack on Thomas Piketty when his book which highlighted the point about widening inequality and how the dynamic of today's capitalism contributes to it. Then the quibble was about how r > g would not always hold or that r was greater largely due to higher real estate prices.

The point about implementation difficulties is one of the main arguments against progressive measures like wealth tax, higher income taxes, breaking up tech companies, and taxing multinationals. This is unsurprising since implementation of most radical changes will ex-ante always appear challenging. But in this case, it is a bit rich coming as it does from ideologues who have played a major role in entrenching the narrative around far more difficult implementation endeavours like valuation of start-ups or executive compensation, both of which have engendered egregious excesses and perverse incentives. 

With nomenklatura like Larry Summers representing them, the Liberals should not be surprised by the rise of the likes of Donald Trump!