POLITICS
07/09/2017 02:28 pm ET

Treasury Secretary Denies That Steve Bannon Urging A Tax Hike On The Rich

Both Axios and Fox News reported that the White House strategist is pushing to increase top tax rates to 40 percent.

Treasury Secretary Steven Mnuchin denied on Sunday that Steve Bannon, the White House’s chief strategist and populist firebrand, is pushing a tax hike on the richest Americans.

“I have never heard Steve mention that,” Mnuchin said on ABC’s “This Week.” “It’s another example of a false leak that’s being reported.”

Top earners ― people making $418,000 a year or more ― are currently taxed at 39.6 percent, though that number is usually much lower as a result of a byzantine web of loopholes and deductions. Axios reported on July 2 that Bannon told colleagues he wants the top tax bracket to “have a 4 in front of it.” Fox News confirmed the figure the next day.

Mnuchin said the White House plans to release a plan to lower taxes and reduce deductions by September.

“I think it’s very clear kind of we have a proposal out there that the administration has put out with a top rate of 35 percent where we reduce and eliminate almost every single deduction,” he said. “So that means that people who are in the high tax state also have no tax reduction, and it’ll be offset by reduced deductions.”

Trump won a surprise election victory in November in large part due to a populist message, vowing to revive struggling Rust Belt economies and vilifying Democratic presidential nominee Hillary Clinton for her close ties to bankers. But after taking office, the country’s first billionaire president assembled the richest cabinet in history, stacking its ranks with Goldman Sachs executives and Wall Street titans.

Gary Cohn, the former Goldman Sachs president, became director of the National Economic Council and Trump’s chief economic adviser. Wilbur Ross, a billionaire private equity investor, was nominated as secretary of commerce. And Mnuchin, a second-generation partner at Goldman Sachs who previously headed a bank dubbed a “foreclosure machine,” ascended to the top of the Treasury Department.

That wing of the administration remains anxious to quickly push tax reform. Congress passed its last major tax overhaul in 1986. Fearing that Democrats, who are unlikely to vote for anything approved by Trump, could reclaim Congress seats in the upcoming 2018 elections, White House officials want a bill signed into law by next year. If tax reform fails, Cohn ― dubbed by CNBC the “canary for Trump’s tax reform” ― could resign from the White House.

“Cohn has told associates that if tax reform doesn’t get done this year, it’s probably never going to happen,” Axios’ Jonathan Swan reported last week. “Sources who know Cohn speculate that he’ll leave the White House the instant he concludes tax reform is dead.”

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