House Committee on Ways and Means

Mnuchin Talks Taxes and That Vanishing Treasury Study

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“When you do distribution tables, you take a bunch of things like the corporate tax and you distribute them out,” Mr. Mnuchin said, explaining that the lower rate for businesses should be viewed in conjunction with lower individual tax rates. “We’re focused on what does this mean to the middle income in terms of tax cuts.”

On a vanishing Treasury study

Mr. Mnuchin defended his department’s decision to remove a study from its website that found workers would reap little benefit from cutting the corporate tax rate to 20 percent from 35 percent.

Instead, Mr. Mnuchin and the Trump administration pointed to a new study by Kevin Hassett, the chairman of the Council of Economic Advisers, that shows middle-class households will reap thousands of dollars a year if tax rates for companies fall.

“To the extent that there was something that was completely inconsistent with what we’re publishing now, we thought it made sense to take down,” he said. “We didn’t hide the fact that we took it off.”

What about the deficit?

Republican deficit hawks seem to be going extinct these days, but Mr. Mnuchin said that he and President Trump remained mindful of a deteriorating fiscal situation. To sell tax cuts that will reduce revenue by $1.5 trillion over a decade, Mr. Mnuchin is sticking to the view that economic growth from the cuts will be an elixir.

“I think the president is very concerned, as we’ve said all along, about the debt going from $10 trillion to $20 trillion,” Mr. Mnuchin said, referring to estimates by the Congressional Budget Office about the debt trajectory over the next decade.

Explaining that the revenue losses are not as large as they seem and that the acceleration in growth will be greater than many economists believe, Mr. Mnuchin made the case that the lower rates would essentially pay for themselves.

“For every percent of G.D.P., there’s $2.5 trillion of additional revenues,” he said.

Will the market crash if the tax bill flops?

Mr. Mnuchin came under fire in recent weeks after reports that he was threatening lawmakers that financial markets would tank if the tax bill faltered.

But he said that he made no such warning and had only suggested that stock markets would do even better if the tax cuts passed.

“If you look at the stock market, as I’ve said, the stock market is clearly up in anticipation of economic activity and economic growth from the Trump administration plan,” Mr. Mnuchin said.

A pivot to financial regulation

If and when the tax bill is signed, Mr. Mnuchin will most likely turn more attention to financial regulation and working to make changes to the Dodd-Frank law.

He said that he was optimistic that there could be bipartisan support for moves that would make community and regional banks more competitive and that there was a lot of discussion about raising the threshold of $50 billion in assets that forced banks to face tougher oversight.

“We think there’s definitely aspects of Dodd-Frank that people think should be reformed,” Mr. Mnuchin said of the prospects of Democrats working with Republicans on regulation.

Not sweating the hot seat

Prominent lawmakers such as Senator Chuck Schumer, the Democratic leader, and Larry Summers, a former Treasury secretary under President Bill Clinton and a top economic adviser to President Barack Obama, have called Mr. Mnuchin a sycophant and a liar for defending Mr. Trump and for arguing in favor of the Republican tax plan, saying it won’t benefit the rich.

Mr. Mnuchin insists he is not offended.

“I don’t take it personally at all,” Mr. Mnuchin said. “I have a lot to do. I wake up every morning and we have a huge agenda.”

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Wendy Pettit

Wendy Pettit is a writer for NYT and writes for other publications on her spare time. She lives in Chicago with her husband and her dog Zuko.

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