Mnuchin pledges 'fix' to tax plan's deduction elimination

Cheryl Sanders
October 19, 2017

Steven Mnuchin honored the fine folks over at Politico by being the inaugural guest for their "Politico Money" podcast. Faced with economic analyses showing the White House plan to cut corporate and personal income taxes provides big gains for wealthy Americans, Mnuchin called that result unavoidable.

"The top 20 percent of the people pay 95 percent of the taxes".

Mnuchin's warning comes ahead of a vital vote in the Senate on Thursday on a budget resolution, which would pave the way for a tax cut worth up to 1.5 trillion USA dollars over 10 years. "So when you're cutting taxes across the board, it's very hard not to give tax cuts to the wealthy with tax cuts to the middle class".

"Citizens for Ethics and Responsibility in Washington " The math, given how much you are collecting, is just hard to do", the treasury secretary added.

That represents a dramatic reversal from Mnuchin's initial assertions on the subject. "To the extent we get the tax deal done, the stock market will go up higher", he said.

"The president's objective is to create a middle-class tax cut", he told me.

Mnuchin also gave an "absolute guarantee" that Trump will sign a tax reform bill before the end of this year. Instead, she claimed that cutting taxes for the middle class remains "the focus and the priority". "So we'll see where it comes out".

Now that more details about the Trump tax plan are out and analysts say it would disproportionately benefit the wealthy, Mnuchin is backing even further away from his earlier line. The Washington Post, listing the "hurdles" in the way of passing a plan, notes, "they haven't sorted out how to ensure that the majority of any tax cuts don't benefit primarily the wealthy".

That promise was quickly christened the Mnuchin Rule - and, nearly as quickly, the Treasury Secretary started softening that assertion. Yet his new remarks to Politico not only conceded that the rich will get a tax cut, but cast it as mathematically inevitable. The reality is, thought, that only a few thousand Americans will ever pay the estate tax and they all come from an absurdly wealthy cluster of the country which makes more money than the tens of millions of people at the bottom end of the national income distribution. Mnuchin's comments are a step back from President Donald Trump's, who said Monday that his administration may not pass tax reform in 2017.

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