Last week the Republican party was at arms after Axios reported that Steve Bannon was said to be pushing president Trump to raise taxes on the wealthiest Americans. According to the website, Trump’s chief strategist was urging to raise the top tax rate on individuals, with Axios saying the former Breitbart CEO looking for the top rate to have “a 4 in front of it” (currently, the highest income-tax bracket in the US is 39.6% for individuals earning more than $414,000 a year).
Well, they can now sleep easier after Treasury Secretary Steven Mnuchin on Sunday killed that particular idea, saying that the Trump administration is not considering a plan to raise taxes on the wealthiest Americans in order to pay for tax breaks for the middle class. Speaking on ABC's "This Week," Mnuchin said the administration plans is “absolutely committed” to releasing its tax plan in early September, and getting it through Congress by the end of the year - and that plan won’t include a 40 percent tax rate for the richest Americans.
“Our plan is to have a full-blown release of the plan in the beginning of September, with being able to vote and getting this passed before the end of the year,” Mnuchin said on ABC’s “This Week” on Sunday.
The “objective” of the proposal is still that no one in the middle class will have a tax increase, Mnuchin said. “We’re finalizing the details of the plan, so there’s certain issues that are still on the table.”
Referring to the Axios report that Bannon was advocating a proposal to raise the highest tax bracket to 40% or above, Mnuchin responded "I've never heard Steve mention that" and added that “it’s very clear, kind of, we have a proposal out there that the administration has put out, with a top rate of 35% where we reduce and eliminate almost every single deduction.”
Mnuchin said the administration’s plan would pay for itself, but that’s only if about $2 trillion in increased revenue resulting from projected faster economic growth is included. Yet congressional budget scorekeepers may not agree that tax cuts would produce such growth. Under congressional budget rules, tax cuts can be passed with a simple majority in the U.S. Senate, but only if they don’t increase the deficit after 10 years. That would allow Republicans, who have 52 Senate seats, to pass the bill without any Democratic votes.
The Treasury Secretary also said that the administration is aware of the concerns in high-tax states, where taxpayers could have no tax reductions as well as fewer deductions. “We’ve heard a lot of feedback from New York, California, New Jersey, Connecticut, Illinois, and I think we want to be sensitive to those states and those economies as we shape the plan,” Mnuchin said.
Separately, Mnuchin - who spoke after returning from the Group of 20 meeting in Hamburg - dodged a question about whether President Donald Trump had accepted President Vladimir Putin’s denial of Russian interference in the 2016 U.S. election.
“Why would President Trump broadcast exactly what he said in the meeting?” Mnuchin said, adding that Trump is focused on “strategically negotiating” with Putin.