FALLING FOUL OF THE TAXMAN IS ONE THING. BUT THE ‘NET WORTH ASSESSMENT’ IS REALLY SCARY.
The top Democrat on the tax- writing Senate Finance Committee said a bipartisan tax deal is impossible if U. S. Treasury Secretary Steven Mnuchin can’t commit to an overhaul that avoids giving the highest- earning Americans a tax cut.
“We will not get bipartisan tax reform when the Secretary of Treasury walks back a pledge to have no absolute tax cuts for the wealthy,” Ron Wyden, an Oregon Democrat, said Tuesday during a Senate Budget committee hearing.
Democrats have signalled during previous hearings that they aren’t likely to cooperate with the GOP’s tax plans — and Senate Republican leaders have said they’re planning to pass legislation with only their own party’s votes. The GOP controls 52 of the Senate’s 100 votes.
But using a partisan approach would mean the White House and GOP lawmakers must find ways to offset rate cuts for individuals and companies with revenue raisers or settle for only temporary changes. Under Senate rules that would allow for a party- line vote, any provisions in a tax bill that would increase the long-term deficit would have to be set to expire.
Last year, Mnuchin said during an interview on CNBC Trump’s tax plan would benefit the middle class and offer no absolute cut to the upper class — because any rate cut for high earners would be offset by ending other tax breaks that they use often.
While tax experts have questioned whether that’s possible, Wyden seized on the statement to coin the phrase the “Mnuchin Rule.” During a separate hearing Monday, Mnuchin said his comments about avoiding cuts for the wealthy were an objective — not a firm rule.
“I have walked it back from my CNBC interview,” Mnuchin said Tuesday. The Treasury chief said he and the president are focused on reaching agreement with congressional leaders now.
“Our focus is on getting tax reform done — to get tax reform done it’s my job to figure out what meets the president’s objective, what meets the House and the Senate so that we can get something signed into law and there will be compromises along the way,” Mnuchin said.
While Trump has yet to release full details of his tax plan, he pitched it during his campaign and since as a tax cut for the middle class. The plan calls for reducing the number of individual tax rates to three, and cutting the top rate to 35 per cent from 39.6 per cent — a change that would represent a major tax cut for the highest earners.