This tax ‘plan’ is a bust

The White House had promised to roll out a “tax plan” Wednesday. Instead of a fully developed plan, Treasury Secretary Steven Mnuchin and senior adviser Gary Cohn put out a one-page sheet with bullet points, something you might see as a first draft of a campaign white paper. Worse yet, as we anticipated, Mnuchin and Cohn wound up getting grilled on whether President Donald Trump, who stands to save millions (via, among other things, elimination of the alternative minimum tax), would release his tax returns. Mnuchin was emphatic: “The president has no intention.” He falsely asserted, “The president has released plenty of information and I think has given more financial disclosure than anybody else. I think the American population has plenty of information.” He and Cohn had no specifics about the savings for voters by tax bracket or about the expected increase in the debt.

The Post reported, “The proposal is a one-page outline — key details are left incomplete — but it presents an initial offer to begin negotiations with lawmakers, as White House officials think reworking the tax code is one of their biggest priorities to boost economic growth.” The plan appears to be more of a pipe dream than a viable plan. (“Many budget experts say they believe the White House’s plan would reduce federal revenue by so much that it would grow the debt by trillions of dollars in the next decade, growing interest costs and slowing the economy.”)

On its face, it seems to offer massive tax cuts for rich individuals who can use pass-through companies to pay a 15 percent corporate rate. The plan would eliminate all individual deductions except the charitable and mortgage interest deductions. It was not clear whether the plan would keep the exclusion for employer-provided healthcare plans, which, if taxed, could substantially raise taxes for middle- and workingclass workers. In addition, the proposal would eliminate the estate tax, benefiting only a tiny number of super-rich heirs because estates up to $5.49 million are already excluded.

In short, the hyped rollout was a bust. House GOP leaders gingerly praised the outline as providing “critical guideposts” for their tax-writing efforts. In some sense, the Republicans now have the worst of all worlds. There is a White House plan hanging out there that would seemingly deliver huge tax cuts for the rich and create a gusher of red ink, but with no hope in the short term of passing it.

Senate Minority Leader Charles Schumer, D-N.Y., slammed the proposal. “At a time when income distribution is getting even worse in America, the President’s outline clearly makes life easier for the wealthy and special interests and makes life harder for middle class and lower income Americans,” he said in a written statement. “It couldn’t come at a worse time. Clearly, the President and those at his level of wealth would benefit while tens of millions of American families are hurt.”

House Minority Leader Rep. Nancy Pelosi, D-Calif., blasted it as well. “True to form, President Trump’s tax plan is short on details and long on giveaways to big corporations and billionaires,” she said in a written statement. “Instead of focusing on hard-working families as he promised, President Trump’s tax outline is a wish list for billionaires.” She added, “What few details are here overwhelmingly cut taxes for the richest and do little for middle class Americans and those trying to get there. Besides which, nowhere does President Trump indicate how his deficit-exploding tax plan will actually be paid for.”

The Committee for a Responsible Federal Budget gave it the back of the hand in a written statement, which read in part: “Unfortunately, it seems the Administration is using economic growth like magic beans — the cheap solution to all our problems. But there is no golden goose at the top of the tax cut beanstalk, just mountains of debt. Here is some real math: Debt is twice its historical average; higher as a share of the economy than any time outside of the World War II era; and growing faster than the economy with no end in sight.”

Thanks to Trump, Republicans, including the GOP candidate in the Georgia 6th Congressional District special election, are going to be asked whether they support it. If not, the base may get huffy. If they do embrace it, they will get slammed as catering to the rich and setting a new level of fiscal irresponsibility. CNN quotes one griping senior GOP aide as saying, “It’s really easy to talk about big cuts. We’re about solutions. They aren’t to that point yet, either on the policy or on the personnel level, and it’s both obvious and disruptive to the process.”

This is classic Trump — all flash and big talk, with very little substance. His economic team plainly was not prepared to provide anything approaching a detailed “plan,” but now Republicans’ actual tax plan, if they ever come up with one, will be judged in comparison with a cotton-candy plan that could never become law. Trump did “accomplish” one thing — he reminded us he has concealed his taxes and may stand to reap enormous tax savings as a result of his plan. This hardly seems like populism.