Mnuchin Predicts Market Meltdown If Tax Reform Fails

Lester Mason
October 18, 2017

Republicans have also struggled to deliver on their stated goal of a tax cut for the middle class, since their framework calls for simplifying the tax code by eliminating a plethora of deductions and exemptions that benefit lower- and middle-income households. After last November's election, he appeared on CNBC to pledge that wealthy Americans would receive no tax cut whatsoever. "To the extent we get the tax deal done, the stock market will go up higher".

Equities could be in line for a serious correction should US tax cuts fail to be enacted, according to the US Treasury.

Though their tax blueprint is short on details, a preliminary analysis by the Tax Policy Center found the richest 1 percent of households would reap 80 percent of the benefits of the proposed changes. "His priority is about creating a middle-income tax cut".

Has the White House abandoned the possibility of an additional top rate? Mnuchin's comments are a step back from President Donald Trump's, who said Monday that his administration may not pass tax reform in 2017. "The wealthy are not getting a tax cut under our plan", National Economic Council Director Gary Cohn told ABC recently.

That promise was quickly christened the Mnuchin Rule - and, nearly as quickly, the Treasury Secretary started softening that assertion.

Of course, cutting the payroll taxes that all workers pay to finance Social Security, rather than income taxes, would produce a different mathematical outcome. The reason Republican plans cut taxes for the rich is that Republicans believe rich people are paying far too much in taxes, not because there's some conceptual barrier to not cutting their taxes. Other features of the plan that voters indicated they would support include a one-time repatriation tax for income held overseas and a repeal of the estate tax. The reality is, thought, that only a few thousand Americans will ever pay the estate tax and they all come from an absurdly wealthy cluster of the country which makes more money than the tens of millions of people at the bottom end of the national income distribution.

Other reports by Iphone Fresh

Discuss This Article