Lawrence Summers Quotes
I don’t think that Bill Gates, in his garage, was calculating his marginal tax rate.
This is a very important economic-political quotation. One conservative mantra in the 20th and 21st centuries was that business growth and development will be spurred by tax cuts in the marginal tax rate that the businessperson would have to pay. “Marginal” means the additional tax for each additional dollar of income. However, the development and growth of most businesses, especially the entrepreneurial ones that tend to create the most new high wage jobs. Bill Gates, Henry Ford, Steve Jobs, Thomas Watson Jr. and other creators of great business enterprises, in general do not even consider their potential profit as the most important reward. They are almost always on a mission to change the way people function in the world. They generally want to make money but the driving factor is really the change in society that they will produce. While Gates and other great business creators do not change their business behavior on the bases of marginal tax rates (or any other kind to tax rates for the matter), the 2nd and 3rd generation of business manager who takes over existing companies is motivated in great part by marginal tax rates. Summers and many others argue that not only are the best jobs created by those who are unmotivated by tax rates, but they are the same businesses that tend to produce most of the great innovations of society. Therefore, find other ways to incentivize the entrepreneurs rathefr than marginal tax rate policy.
Lawrence Summers, U. S. Secretary of the Treasury (Democrat), President, Harvard University, Response to interviewer who asked him for his hypothetical prognosis if there were major economic failures throughout the American economy, Quoted in New York Times Magazine, May 6, 2013
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The implication of the investment in infrastructure and education is that the state must tax people at a rate that would pay for it. But if the rate is too high, he argues, people will not make a sufficient profit from their work.
Lawrence Henry Summers is an American economist, former Vice President of Development Economics and Chief Economist of the World Bank (1991–93), senior U.S. Treasury Department official throughout President Clinton's administration (ultimately Treasury Secretary, 1999–2001), and former director of the National Economic Council for President Obama (2009–2010). He is a former president of Harvard University (2001–2006), where he is currently (as of March 2017) a professor and director of the Mossavar-Rahmani Center for Business and Government at Harvard's Kennedy School of Government.
