On “Good Morning America,” Mnuchin said, “This is about middle-income tax cuts,” though when pressed, he wouldn’t promise that no middle-class families would see a tax increase. Asked about the plan’s spectacular giveaways to the wealthy on the “Today” show, he said, “This isn’t about a dramatic cut in taxes for the wealthy … this is about a middle-income tax cut … this is all about jobs, jobs, jobs.”
We’re likely to see this a lot in the coming days: Journalists saying, “Isn’t this a huge gift to the wealthy?” and administration spokespeople responding, “No, no, we care only for the middle class and creating jobs.” In order to break that impasse, we have to ask the administration and Trump a different set of questions, ones that are more specific and harder to evade. Here are some suggestions:
You claim that the tax cut will create so much growth that it will pay for itself. This is what Republicans say before every tax cut that they pass, and it is always wrong. Why is this time going to be different?
If Republicans could point to a case in which a tax cut such as this one created so much growth that revenue will actually increase and the deficit won’t balloon, they’d be on much firmer ground. But they can’t. The Reagan tax cuts reduced revenue (though it later rose after he increased taxes). The George W. Bush tax cuts reduced revenue. Even Republican economists admit that the administration’s assertion on this question is ridiculous. Yet they want us to believe that everything is going to be different this time. Why?
Sixteen years ago, President George W. Bush made exactly the same arguments you’re making, in defense of a similar tax cut. The results were abysmal: a huge deficit; poor growth in GDP, jobs and incomes; and eventually a financial cataclysm. What did Bush do wrong?
Framing the question this way demands that they get specific about why their tax cut will be so much better than the Bush tax cuts. Or let’s try a slightly different comparison …
Your tax plan looks remarkably similar to the plan Sam Brownback passed in Kansas, which everyone agrees has been an abysmal failure. Why would it work differently at the federal level?
When he took office in 2011, Gov. Brownback passed a plan that cut the top income tax rate, cut taxes on income from “pass-through” businesses and reduced the number of tax brackets — all core elements of Trump’s plan. Conservatives claimed Kansas’s economy would erupt with growth, becoming a model of how conservative economics can create prosperity for all. Instead, revenue plunged, leading to brutal cuts in schools and other services. GDP and job growth have been far below the national average. Now Trump wants to take the idea national. Why should we expect a different result?
The administration’s position seems to be that giving a dollar in benefits to a wealthy person is better for the economy than giving a dollar in benefits to a poor or middle-class person. Can you explain how that’s supposed to work?
The rationale for cutting taxes in the manner they’re doing is nothing new. It’s trickle-down economics — the idea that if you give benefits to the wealthy and corporations, the benefits will trickle down to everyone else. If their goal is to help the middle class, they could just give benefits to the middle class. Instead, they want to give huge benefits to the wealthy but convince us that the goal is really to help those in the middle. In fact, some analyses are already suggesting that millions of middle-class families could see a tax increase under this plan.
Let’s say you’re wrong and the tax cuts increase the deficit, as has always happened in the past and as every serious economist says will happen. Would you be willing to come back in two or three years and repeal the cuts?
It’s hard not to suspect that people in the administration know full well that a plan like this one would balloon the deficit, which they claim to care about. So how about getting them on record either pledging to repeal it if their predictions don’t come true, or admitting that the deficit is far less of a concern for them than giving the rich a tax cut?
Your plan eliminates the inheritance tax, which right now is paid only by wealthy heirs who inherit more than $5.49 million. How does that help grow the economy?
The inheritance tax is paid only by the wealthiest estates — tax is owed only on the estates of about 1 in 500 people who die. But it would mean that, to just pull a random example, when Donald Trump dies, his children would receive hundreds of millions or even billions of dollars tax-free. It would be most edifying to hear someone explain how that is essential to the health of the American economy.
Exactly how much will President Trump personally benefit from the tax changes you’re proposing?
Americans have a right to know how much of a windfall the president will reap, and some of the provisions in the plan will be tremendously helpful to him. Most notably, the plan would tax income from “pass-through” corporations, which is now taxed as regular income, under a new corporate rate of only 15 percent. Trump receives his income through a web of hundreds of pass-through corporations, which means that it’s almost certain that if this plan were to pass, he’d be getting a benefit worth hundreds of millions or even billions of dollars over time. But we don’t know exactly how much, because he still refuses to release his tax returns.
These are just some of the questions we should ask, but what’s most important is that we force the administration to be as specific as possible — about what their plan does, what they expect from it and why they believe it will do what other similar plans haven’t done in the past. This plan is being presented inside a fog of misleading claims and preposterous predictions, and we have to wave that fog away if the public and our representatives are to make a judgment about whether this is something they want to support.