Trump’s chief economist insists tax cuts for the ultra-rich will ‘trickle down’ to ‘a lot of people’
White House economic adviser Gary Cohn defended Republicans’ proposed tax cut legislation on Thursday by explicitly saying that tax cuts for wealthy people will “trickle down” to the rest of the economy.
In an interview with CNBC, Cohn said that middle-class families are getting a comparatively small tax cut in the plan because it would be difficult to cut their taxes much further.
“You can’t go much further in the tax system,” he said. “Unless you want to start going negative tax rates and go into the negative world.”
The best way to really benefit middle-class families, Cohn insisted, was to cut taxes for corporations that would then use that windfall to raise workers’ wages.
“We create wage inflation, which means the workers get paid more; the workers have more disposable income, the workers spend more,” Cohn said. “And we see the whole trickle-down through the economy, and that’s good for the economy.”
Cohn also defended the plan’s phase out of the estate tax, which would be a massive boon for President Donald Trump’s own children, as well as the children of other wealthy families.
“Are you seriously saying with a straight face that getting rid of the estate tax is about farmers and not about very wealthy families?” CNBC’s John Harwood asked Cohn.
“What I’m saying is that it benefits farms, it benefits small businesses, it benefits a lot of different people,” Cohn replied.
“Small businesses with more than $11 million estates?” Harwood countered.
“We do not believe that death should be a taxable event,” he said.