Thursday, November 09, 2017

Gary Cohn, Trump's Economic Advisor, on the Unavoidable Tax Cuts For The Rich

Gary Cohn's arguments about the Republican "tax reform" plan are worth thinking about, because he is hilarious.  He is Trump's economic advisor, and in a recent interview explains why most of the goodies from the Republican tax plan would fall in the laps of the wealthy.

At first he states that the warped outcome of how much various income groups would benefit is just an accident:  Somehow all the money just slipped into a few pockets:

Among other bloopers, the National Economic Council director explained that CEOs of big corporations were “the most excited group out there” about a proposal that would ultimately raise taxes on a good chunk of the middle class. He also said that while the administration hadn’t “set out” to lower taxes on the wealthy, he’s “not upset” about it, as if its massive rate cuts for business owners were merely some form of serendipity.
I'm sure Gary is not upset about getting a lot out of the Republicans' plan, of course.

Then he gives a different excuse for why the middle class will not benefit that much:

Cohn: Yup. But, John, if you look at what we’re doing for middle-class taxpayers, the reality is kind of simple. The median-income family in the United States, the family that earns about $60,000 in the United States, the Speaker [Paul Ryan] talked about them getting a $1,182 tax cut. That family is now paying a marginal tax rate of less than 1 percent. They’re paying less than $500 of total taxes in the system. So a $60,000 earner, family of four, is paying less than $500. We have cut their taxes significantly. You can’t go much further in the tax system.
Harwood: You’re saying you can’t give middle-class taxpayers more of a tax break than you’ve done?
Cohn: Unless you want to start going negative tax rates and go into the negative world. So, when people score this, you’re scoring against the bound of zero.

I'm having so much fun with that.  Remember the many Trump tweets about BIG LEAGUE tax cuts for the middle classes?  Here's one example from the time of the campaigns:

But now his economic advisor says that This Cannot Be Done.

Never mind.  Let's take one more step backward and ask why the Republicans are spending all their remaining energy on trying to get those tax cuts passed, if there's really no way to give the middle class families any kind of "big league" income tax cuts.

The only answer must be that the goal indeed was to return a lot of money into the pockets of the super-rich.  That this money must come from reducing government expenditure (on the poor and on the elderly, it seems) is just an unfortunate and unintended side-effect, too, I guess.