In an interview with CNBC Wednesday, Donald Trump’s Secretary of the Treasury pick, Steven Mnuchin, explained how the president-elect’s tax proposals will impact Americans. The main goal of Trump’s tax policy, he said, is to help the middle class. As for the wealthy, “there will be no absolute tax cut.”
“Any reductions we have in upper-income taxes will be offset by less deductions so that there will be no absolute tax cut for the upper class,” Mnuchin told CNBC’s “Squawk Box.”
While he said they plan to keep many deductions, including mortgages and deductions involving some charities, they will be capping mortgage interest, though they will “allow some deductibility.”
Mnuchin pushed back against claims that Trump’s tax policies would actually result in parts of the middle class paying more in taxes, particularly single-parent households, making clear that the priority is to lessen the burden on that large segment of the country. A “big aspect” of the savings, he said, is the child care credit.
“When we work with Congress and go through this, it will be very clear. This is a middle-income tax cut,” said Mnuchin.
CNBC notes that an analysis by the Tax Policy Center found that Trump’s policies would positively impact almost all levels of income earners, but would help upper-income earners the most and lower income earners the least. According to TPC, the top 0.1 percent of earners would receive about 14 percent average in after-tax income savings, that percentage dropping to 1.8 for the middle fifth of income earners and below 1 percent for the poor.
TPC also predicts that Trump’s tax policy will negatively impact federal tax revenues and the federal debt: “His proposal would cut taxes at all income levels, although the largest benefits, in dollar and percentage terms, would go to the highest-income households,” TPC states in the summary of its findings. “Federal revenues would fall by $6.2 trillion over the first decade before accounting for added interest costs. Including interest costs, the federal debt would rise by $7.2 trillion over the first decade and by $20.9 trillion by 2036.”