A day after President Trump's administration laid out his position on how to reform the tax system, his advisers offered more details on where the White House is headed — but it seems they still have not worked out all their differences.
On Wednesday, the administration gave reporters a single page listing the president's general principles for reforming the tax code. The brief document called for reducing rates on individual taxpayers and in particular on businesses, but offered only vague hints on challenging issues such as eliminating breaks and loopholes, helping parents financially with child care and taxing complex, multinational corporations.
By Thursday afternoon, administration officials had seemingly tacked on a few more details, contradicting themselves or each other on several key points.
From the start, members of the administration have offered inconsistent explanations of how the tax plan would affect the middle class.
When National Economic Council director Gary Cohn was asked what Trump's reforms would mean for the typical middle-class family in a briefing at the White House on Wednesday, he said the plan was “going to mean a tax cut.” Pressed on how much that family would save, Cohn repeated himself, saying the plan was “going to mean a tax cut.” He added that how much of a cut would be knowable only after the administration and Congress had put together a complete plan.
Cohn was joined at Wednesday's briefing by Treasury Secretary Steven T. Mnuchin, who the next morning offered another caveat. Asked whether all middle-class households would benefit from the plan or whether some might pay more, Mnuchin declined to say.
The plan Trump had put forward as a candidate would have increased taxes on some families — especially those with single parents or many children, who benefit from certain breaks in the current system that Trump proposed eliminating.
“Can you guarantee that no one in the middle class is going to pay more?” George Stephanopoulos of ABC News asked Mnuchin on “Good Morning America.”
“I can't make any guarantees until this thing is done and it’s on the president's desk,” Mnuchin said.
Later Thursday, White House press secretary Sean Spicer attempted to clarify the confusion — again pledging middle-class households could expect a tax cut.
The conflicting messages from Trump's deputies suggest further difficulties await his administration as they pitch an overhaul of the country's tax system to lawmakers and the public. The administration has not settled basic questions about their approach to the tax code, which could complicate the process of adopting a standard set of talking points, selling their plan's strong points and defending its weaknesses.
The administration has been pressed repeatedly how it plans to make up for all the money the government will not take in if rates are cut steeply. Cohn and Mnuchin said Wednesday the plan would end the tax breaks known as deductions, generating more money for the government.
Cutting rates is typically more politically popular than scrapping deductions, exemptions and other goodies, as many of them are broadly popular or backed by influential lobbyists.
Spicer was asked at the White House on Thursday for clarification about whether Trump would consider eliminating benefits in the tax system for those saving for retirement, such as owners of 401(k) accounts.
“The secretary of the treasury and director Cohn yesterday both talked about that. The current plan right now both protects charitable giving and mortgage interest, and that's it,” Spicer said.
Many interpreted that statement to mean the benefits of 401(k)s and other savings accounts were on the chopping block. Ending those breaks would involve radical changes to the country's retirement system.
The White House, however, later clarified that getting rid of the benefits for 401(k)s and other accounts was not under consideration. Legally, those benefits are in a different category from deductions, such as those for mortgage interest and charitable giving, to which Cohn and Mnuchin were referring the day before.
Even then, however, Mnuchin and Cohn were on different pages.
According to the document released Wednesday, the administration would seek to “eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers.” Cohn said the administration wanted to “eliminate most of the tax breaks that are mainly benefits to high-income individuals,” while explicitly saying that home-ownership, charitable giving and retirement savings will be protected.
A few minutes later, however, Mnuchin went further, dropping Cohn's qualification that “most” breaks would be eliminated, especially those that benefit the rich most. Instead, Mnuchin said the administration would “eliminate, on the personal side, all tax deductions other than mortgage interest and charitable deductions.”