Saul Loeb/Getty Images

Trump’s Top Economic Adviser Goes Full-Plutocrat in Embarrassing CNBC Interview

Gary Cohn, the former Goldman Sachs president who’s now Donald Trump’s top economic adviser, accidentally went full-plutocrat during an interview with CNBC’s John Harwood published Thursday, while attempting to defend the administration’s ludicrously regressive tax plan. Among other bloopers, the National Economic Council director explained that CEOs of big corporations were “the most excited group out there” about a proposal that would ultimately raise taxes on a good chunk of the middle class. He also said that while the administration hadn’t “set out” to lower taxes on the wealthy, he’s “not upset” about it, as if its massive rate cuts for business owners were merely some form of serendipity.


Cohn also left it unclear whether he had any idea how much middle-class families actually pay to the IRS each year—a fairly important detail that one might expect the White House’s point man on tax reform to know. During the interview, Harwood pointed out that the House Republican plan spends lavishly to lower rates for big businesses, but only modestly helps ordinary families. Cohn readily agreed, and proceeded to explain that the bill couldn’t possibly lower middle-class taxes any further because they were already so low. Here’s the exchange:

Harwood: If you look at Joint Tax, $1 trillion in net cuts for business, $200 billion through the estate tax, and $300 billion for individuals. So, four times as much in business tax cuts and estate tax as for individuals.
Cohn: Yup. But, John, if you look at what we’re doing for middle-class taxpayers, the reality is kind of simple. The median-income family in the United States, the family that earns about $60,000 in the United States, the Speaker [Paul Ryan] talked about them getting a $1,182 tax cut. That family is now paying a marginal tax rate of less than 1 percent. They’re paying less than $500 of total taxes in the system. So a $60,000 earner, family of four, is paying less than $500. We have cut their taxes significantly. You can’t go much further in the tax system.
Harwood: You’re saying you can’t give middle-class taxpayers more of a tax break than you’ve done?
Cohn: Unless you want to start going negative tax rates and go into the negative world. So, when people score this, you’re scoring against the bound of zero.

There are multiple reasons why this line of argument is ludicrous, but the most glaring one boils down to exactly two words: payroll taxes. The levies that fund Social Security and Medicare are often a much bigger burden on low- and middle-income families than federal income taxes. As Seth Hanlon of the Center for American Progress points out, the family that Cohn uses as an example would pay more than $4,000 next year in payroll taxes. There are plenty of ways Republicans could cut that total without going “into the negative world,” as Cohn put it. In fact, one of the simplest and best proposals to do so comes from two GOP senators, Mike Lee of Utah and Marco Rubio of Florida, who want to let families fully count the child tax credit against their payroll taxes. So far, it appears their idea is being largely ignored, while their party plots enormous cuts for corporations.

Presumably, Cohn has an inkling that payroll taxes are a thing that exist and could maybe be cut. But telling Harwood that a middle-income family would pay less than $500 “into the system” under the GOP plan suggests he has little idea how much money regular households actually owe in taxes, and isn’t seriously considering ways to lighten the load. With the exception of figures like Lee and Rubio, this kind of thinking is unfortunately par for the course among most Republicans (or “Democrats” who work for them, like Cohn). It’s a mindset that says the only real taxes are the ones that rich people pay.

More from Business

Amazon Should Be Very Careful About Banning Customers for Making Too Many Returns

Journalists Are Playing Right Into Elon Musk’s Hands

Why the Marijuana Industry Wants Friends Like John Boehner

Eighties Babies Are Officially the Brokest Generation

The Andy Warhol Foundation Should Save Interview Magazine

Maybe Trump Hasn’t Driven Up the Uninsured Rate After All