When Cohn joined the Trump administration, many corporate executives were relieved, seeing him as a steadying influence.
.. Now, unfortunately, both Cohn and Mnuchin are endangering their reputations in their attempts to sell a tax cut.
.. Within the administration, there are real differences among how top officials have behaved and how they are perceived. Several — Tom Price, Reince Priebus, Sean Spicer and Rex Tillerson — have badly sullied their standing with virtually everyone outside the administration. After long careers, they have turned themselves into punch lines.
.. The clearest exception is Jim Mattis, the defense secretary. Mattis has done so partly by avoiding scandal and minimizing conflicts with Trump. But he has also been careful to set his own ethical boundaries. Can you recall a single time when Mattis has said something outright untrue? I can’t. That’s how he has retained his dignity in the eyes of so many people.
.. In the early stages of promoting Trump’s tax cut, they have made a series of statements that are blatantly false — not merely shadings of truth or questionable claims but outright up-is-down falsehoods mocked by various fact-checkers. The statements make the two look more like Trump press secretaries than serious business executives whom members of Congress can trust.
.. They fall into two main categories. The first is who benefits from the tax plan. “Wealthy Americans are not getting a tax cut,” Cohn said on “Good Morning America.” He was echoing a promise that Mnuchin had made before the inauguration: “Any reductions we have in upper-income taxes will be offset by less deductions, so that there will be no absolute tax cut for the upper class.”
.. Want to guess how many families in New York State — population 20 million — are wealthy enough that they’re likely to pay any estate tax next year, according to an estimate based on I.R.S. data? Just 470. The number is so low in Montana, Vermont, West Virginia and four other states — likely fewer than 10 families in each — that the I.R.S. doesn’t provide details, to avoid privacy concerns.
.. Then there are the two men’s deficit claims. “This tax plan will cut down the deficits by a trillion dollars,” Mnuchin said. Cohn claimed that “we can pay for the entire tax cut through growth.”
.. The Harvard economist Greg Mankiw coined the phrase “charlatans and cranks” specifically to describe people who claim that tax cuts pay for themselves. And Mankiw is a conservative who’s worked for George W. Bush and Mitt Romney.
.. Neither one of them has yet turned 60 years old. These won’t be their last jobs.
Trump’s Tax Push Begins
The best test for judging any Trump administration tax plan is the Mnuchin test — the standard that President Trump’s own Treasury Secretary, Steven Mnuchin, laid out a few months ago:
“Any reductions we have in upper-income taxes will be offset by less deductions, so that there will be no absolute tax cut for the upper class. There will be a big tax cut for the middle class, but any tax cuts we have for the upper class will be offset by less deductions that pay for it.”
I’ll repeat the key phrase for emphasis: “there will be no absolute tax cut for the upper class.”
Mnuchin was right to make this commitment. While middle-class incomes have stagnated, the top 0.01 percent of earners have had their average inflation-adjusted income roughly quadruple to $11.3 million since 1980. Their taxes have fallen, too. There’s no justification for cutting those taxes further.
Yet on Wednesday Trump, with Mnuchin as the pitch man, proposed precisely that, violating Mnuchin’s own standard.
Think tax reform will be easy for Trump? Ha, ha.
“The rich will pay their fair share,” Trump the populist promised his supporters during the campaign, when he often railed against upper-class greed and special-interest tax breaks.
.. Treasury Secretary Steven Mnuchin has repeatedly pledged that the administration would offer life-changing, economy-transforming tax cuts for the working class. Any tax-rate cuts for the wealthy, on the other hand, would be fully canceled out by closing deductions, credits and other loopholes. On net, the wealthy would pay the same amount they are now — hey, maybe more!
.. Sen. Ron Wyden (D-Ore.) dubbed it the “Mnuchin rule.”
.. Trump’s plan would give rich people the biggest tax cuts of any income group.
That’s true however you slice it. The top 1 percent of taxpayers get the biggest cut in raw dollar terms, as a percentage of their incomes and as a percentage of total tax cuts. They’d receive nearly half the total tax cuts under Trump’s plan (and three-quarters of all the cuts under the House GOP plan).
.. owners of pass-through businesses (which include sole proprietorships, partnerships and S-corporations) to be taxed at a flat rate of 15 percent rather than the regular individual income-tax rates.
.. Just as all of Trump’s health-care promises proved impossible to square, so too will his tax populism collide with the plutocratic reality of his true priorities.