The Mnuchin Test Could Fix Trump Really Bad Tax Plan

The best test for judging any Trump administration tax plan is the Mnuchin test — the standard that President Trump’s own Treasury Secretary, Steven Mnuchin, laid out a few months ago:

“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. There will be a big tax cut for the middle class, but any tax cuts we have for the upper class will be offset by less deductions that pay for it.”

I’ll repeat the key phrase for emphasis: “there will be no absolute tax cut for the upper class.”

Mnuchin was right to make this commitment. While middle-class incomes have stagnated, the top 0.01 percent of earners have had their average inflation-adjusted income roughly quadruple to $11.3 million since 1980. Their taxes have fallen, too. There’s no justification for cutting those taxes further.

Yet on Wednesday Trump, with Mnuchin as the pitch man, proposed precisely that, violating Mnuchin’s own standard.

The Trump plan will overwhelmingly benefit the wealthy, cutting the top income-tax rate, cutting taxes on stock holdings, cutting corporate taxes and eliminating the estate tax. And when a reporter asked Mnuchin yesterday about all the benefits that would flow to the affluent, he ducked the question and offered a vague talking point. The straightforward Mnuchin of a few months ago was nowhere to be seen.

It would be entirely possible to put together a conservative tax plan that simplified the code without exacerbating inequality. But the Trump plan is nowhere near that plan.

In The Times, Nick Kristof cuts through the rhetoric about the plan. Elsewhere, Len Burman of the Tax Policy Center explains “the enormous tax shelter” in the plan. Dylan Matthews of Vox walks through why it’s a “a really, really huge giveaway to Donald Trump, the Trump Organization, and the entire Trump family.”

The Times editorial board also has a piece on the many problems with the plan.

The full Opinion report from The Times follows, including Nancy-Ann DeParle and Phil Schiliro — two architects of Obamacare — on what Trump could do to fix its problems.

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