Treasury Department Takes Down Study Showing Tax Plan Does Not Benefit Working Class

By BESS LEVIN Updated at 2017-09-29 14:20:24 +0000

Mnuchin_reading_at_confirmation


Earlier this week, the Trump administration revealed its long-awaited tax plan, the broad strokes of which are massive tax cuts for people like one Donald Trump and corporate America, at the expense of low-income families and the middle class. Individuals currently paying the top tax rate of 39.6 percent would see that rate drop to 35 percent; businesses organized as pass-throughs—like the Trump Organization—would pay 25 percent; the inheritance tax, which only affects estates worth more than $5.49 million, would go away; and corporations would have their tax rate slashed from 35 percent to 20 percent. Of course, even Team Trump and the G.O.P. know they can’t win support for the plan by just coming out and saying, Rich people, this one’s for you; sorry, we’re not sorry, peasants!, which is why they’ve been claiming their framework is all about helping the average American. “This is a revolutionary change, and the biggest winners will be middle-class workers as jobs start pouring into our country, as companies start competing for American labor, and as wages continue to grow,” Trump said in Indiana on Wednesday night, lying.


BY BESS LEVIN of Vanity Fair

When it comes to the rationale for cutting the corporate tax rate by a whopping 15 percent, Team Trump has been telling people that the savings will ultimately go to the little guy. But as a study by the Center on Budget and Policy Priorities shows, those savings actually largely go to “those at the top,” like chief executives and shareholders, “with only a small share flowing to low- and moderate-income working families.” In fact, until recently, a 2012 paper by the Office of Tax Analysis that could be found on the Treasury Department’s Web site found that “workers pay 18% of the corporate tax while owners of capital pay 82%,” with the nonpartisan Joint Committee on Taxation estimating that “capital bears 75% of the long-run corporate-tax burden, with labor paying the rest.” In other words, Treasury Secretary Steve Mnuchin’s claim that slashing the corporate tax rate would disproportionately benefit workers is, to use economic jargon, total bullshit. It’s the rich guys who disproportionately stand to save the most—by a lot. So what’s a foreclosure magnate-turned-Cabinet official to do? Per The Wall Street Journal:

The Treasury Department has taken down a 2012 economic analysis that contradicts Secretary Steven Mnuchin’s argument that workers would benefit the most from a corporate income tax cut.

Asked about the curious case of a paper at odds with the administration’s point of view, a Treasury spokeswoman told the Journal, “The paper was a dated staff analysis from the previous administration. It does not represent our current thinking and analysis.”

Comments