Steven Mnuchin stressed Thursday that Trump administration tax reform is about helping the middle class, despite widespread concerns that cuts will help the wealthy most.
“Look, as I’ve said before, we’re primarily focused on a middle-income tax cut and simplification for business. And … on the high end, if there are tax cuts, that they are offset with reduction of deductions and other things,” Donald Trump‘s new Treasury secretary told CNBC in his first televised interview since taking office.
“So it’s something we’re going to carefully look at,” he said. “And when we come out with the plan, we’ll come obviously out with the distribution and how it impacts people and that’s something we’re very focused on.”
In November, Mnuchin stated unequivocally that “there will be no absolute tax cut for the upper class” because cuts will be offset by closing loopholes that help the rich. Democrats jumped on the pledge, with Sen. Ron Wyden of Oregon dubbing it the “Mnuchin rule” during the Treasury secretary’s confirmation hearing.
However, ensuring the wealthy get no absolute tax cut could prove more difficult in practice under proposals that call for across-the-board income tax cuts.
Many analyses have estimated that Trump’s campaign-trail tax plan will benefit the wealthy much more than the middle class. The conservative Tax Foundation think tank previously said Trump’s tax proposal during the campaign would boost after-tax income by 0.8 percent for all taxpayer groups but could raise income 10 percent or more for the top 1 percent of taxpayers.
It’s still unclear exactly what the tax reform plan will look like. Mnuchin said the White House and both chambers of Congress are working on a “combined plan.” Trump and House Republicans released separate plans previously, though the lawmakers’ proposal was more detailed and generally got better feedback from economists.
Still, both plans called for reducing the top income tax rate to 33 percent from 39 percent currently. Republicans have also called for cutting the number of income tax brackets from seven to three.