“Eliminating the estate tax would save the Trump Cabinet over a billion dollars," Oliver Willis writes. "Like Mnuchin, Trump’s secretaries would make out like bandits. Commerce Secretary Wilbur Ross would get an extra $545 million. The family of Education Secretary Betsy DeVos would rake in $900 million. Linda McMahon, head of the Small Business Administration, and her husband, WWE founder Vince McMahon, would take in $250 million. Trump’s own net worth is in dispute, thanks to his failure to reveal his tax returns, but based on his estimated net worth of $3 billion, the estate tax scheme would net him $564 million.” (Shareblue Media, Bloomberg)
Former Treasury Secretary Larry Summers made his distaste for the Trump administration’s tax framework clear last week when he said Republicans were using “made-up” claims about the plan and its effects. Summers expanded his criticism on Tuesday in a blog post that took aim at the report released Monday by the Council of Economic Advisers and chair Kevin Hassett, which seeks to justify the administration’s claim that its tax plan will result in a $4,000 pay raise for the average American family.
Never one to mince words, Summers says the CEA analysis is “some combination of dishonest, incompetent and absurd.” The pay raise figure is indefensible, since “there is no peer-reviewed support for his central claim that cutting the corporate tax rate from 35 to 20 percent would raise wages by $4000 per worker.” In the end, Summers says that “if a Ph.D student submitted the CEA analysis as a term paper in public finance, I would be hard pressed to give it a passing grade.”
One of the authors cited in the CEA paper also has some concerns. Harvard Business School professor Mihir Desai tweeted Tuesday that the CEA analysis “misinterprets” a 2007 paper he co-wrote on the dynamics of the corporate tax burden. Desai’s research has found a connection between business tax cuts and wage growth, but not as large as the CEA paper claims. “Cutting corporate taxes will help wages but exaggeration only serves to undercut the reasonableness of the core argument,” Desai wrote.
National Economic Council Director Gary Cohn said Monday that tax reform has to happen this year, even if it means Congress has to stay in session longer. "I think we have a unique window in time right now, but unfortunately we keep losing days to this window,” he said. “The opportunity is now." House Speaker Paul Ryan said last week he’d keep members over Christmas if that’s what it takes. And Ryan predicted Monday that tax reform would pass the House by early next month and then get through the Senate to reach the president’s desk by the end of the year. But there are plenty of skeptics out there, given the hurdles. Issac Boltansky, an analyst at the investment bank Compass Point, told Business Insider, "The idea of getting tax reform done this year is a farcical fantasy. Lawmakers have neither the time nor the capacity to formulate and clear a tax reform package in 2017."
Passing a budget resolution for 2018 through the Senate will open a procedural door to a $1.5 trillion tax cut over 10 years. The resolution is expected to reach the Senate floor this week, although there are questions about whether Republicans have the 50 votes they need to pass it. Sens. Susan Collins (R-ME) said this weekend that she would vote for it and Lisa Murkowski (R-AK) is likely a “yes” as well, but Sen. Rand Paul (R-TN) is reportedly a likely “no” and John McCain (R-AZ) appears questionable. Now it looks like Sen. Thad Cochran (R-MI) won't be back in Washington this week to vote on the resolution due to health problems. The Hill says Cochran’s absence puts tax reform “on knife’s edge.”