A few weeks after Election Day last year, Treasury Secretary Steven Mnuchin said that there would be “no absolute tax cut for the upper class” in the tax reform plan put forth by the incoming Trump administration.
That promise was quickly christened the Mnuchin Rule — and, almost as quickly, the Treasury Secretary started softening that assertion.
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. “If you’re cutting taxes, it is hard to create a system where you’re not going to also cut taxes on the top 10 percent,” he said on Friday. And in an interview with Politico published Wednesday, he added: “The top 20 percent of the people pay 95 percent of the taxes. The top 10 percent of the people pay 81 percent of the taxes. 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.”
One noteworthy response: Michael Linden, a fellow at the liberal Roosevelt Institute, responded on Twitter with five “free ideas that would simplify the code and raise taxes on the rich.” Linden’s full list:
1. Tax capital gains as ordinary income. Right now capital income is taxed at a lower rate. That adds complexity and favors the rich.
2. Tax dividends as ordinary income. See above.
3. End deferral of taxation on overseas corporate profits. Corporations spend $$$ hiding their profits "offshore." Complicated & costly.
4. Get rid of special interest corporate tax subsidies like those for oil, gas, and coal companies. Adds complexity, and benefits the rich.
5. Close the many loopholes and reduce the special rules in the estate and gift taxes. Super complicated and only helps the super rich.