President Trump on Wednesday said the tax changes he hopes to push through Congress could end up raising the bill for the wealthiest Americans, contradicting projections from independent tax experts and breaking with claims made Tuesday by his own treasury secretary.
“I think the wealthy will be pretty much where they are,” Trump said before a meeting with Democrats at the White House about the tax cut effort. “Pretty much where they are … If they have to go higher, they’ll go higher.”
Trump offered no specifics or evidence for how why the taxes would go up.
Trump’s characterization is a shift from Treasury Secretary Steven Mnuchin’s statements Tuesday, when the cabinet official said many wealthy Americans would see a tax cut as a result of the plan. The only wealthy Americans who would see their taxes remain flat could be those living in states such as New York and California, Mnuchin said.
The White House and GOP leaders are hoping to slash income tax rates for the wealthiest Americans, while curbing some of the tax breaks that these people can claim. Those changes in New York and California, Mnuchin said, should essentially offset each other leading to no decrease in revenue.
But both Trump’s characterization of the tax plan and Mnuchin’s are at odds with the projections of budget experts, who say the current plans would disproportionately benefit the wealthiest 1 percent of Americans.
Based on some details Trump and Mnuchin gave about their tax effort back in March, the Tax Policy Center estimated that half of all the benefits from Trump’s tax cut plan would go to the top 1 percent of all Americans. It found that each household in the top 1 percent of Americans would receive — on average — a $175,000 tax cut. Conversely, the average tax cut moderate-income households would be $760.
The proposal would, among other things, cut income tax rates, cut investment tax rates, cut corporate tax rates, jettison the alternative-minimum tax, which is paid by wealthier Americans, and also end the estate tax, which is also targeted at the wealthiest Americans.
“All of our estimates suggest that the ideas being bandied about would greatly reduce tax burdens for high-income households,” said William Gale, a senior fellow in the economic studies program at the Brookings Institution.
The administration’s mixed messaging is fueling confusion about the tax cut plan the White House and GOP leaders are trying to craft and push into law by the end of the year. Many House and Senate Republicans have expressed anxiety about the effort, as many details remain closely held, prompting GOP leaders to promise some more information within two weeks.
Trump’s comments come during two days of meetings with Democrats, when he’s trying to court support from the left to help him secure more votes for any tax cut plan. Many Democrats have said they would not support any tax plan that reduces taxes for the wealthy.
In mid-November, shortly after Trump was elected but before he was sworn in, he visited the upscale 21 Club in Manhattan and received a loud ovation from the other diners.
Someone took a video of him when he was addressing the crowd, and he told them, “We’ll get your taxes down, don’t worry about it.”
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