GARY COHN: 'I'm really not upset' the wealthy might get a tax cut
Ueslei Marcelino/Reuters
- Gary Cohn, the White House's chief economic advisor, said in late September that the wealthy are not getting a tax cut under the proposed GOP plan.
- In an interview with CNBC on Thursday, Cohn softened his position, saying that if the wealthy do get a tax break under the new plan, that's totally fine with him.
Chief White House economic advisor Gary Cohn has changed his tune.
Just six weeks after saying that "the wealthy are not getting a cut under our plan," Cohn backpedaled on Thursday during an interview with CNBC's John Harwood.
While he didn't expressly state that the plan was aimed at giving wealthy citizens a tax break, Cohn acknowledged that it could very well be a byproduct of the plan proposed by the GOP - and said he was totally fine with that.
Here's the exchange in full, which came after Harwood asked Cohn about the corporate tax cut being sought by Republicans (emphasis ours):
Harwood: The companies that benefit from pass-through rates are high income because if they were middle income they'd be paying at the 25% rate already. The vast majority of those benefits go to wealthy businesses.
Cohn: You've got to wait till the whole plan is done and see where we finally end up, and see what the plan comes out. Everything in our tax plan is meant to encourage investment.
Harwood: You're not saying, as you did a few weeks ago, that the wealthy do not get a tax cut under your plan?
Cohn: No. I'm saying there's unique situations to everyone out there. Everyone has their own story. It's not our intention to give the wealthy a tax cut.
Harwood: But they're getting one.
Cohn: I don't believe that we've set out to create a tax cut for the wealthy. If someone's getting a tax cut, I'm not upset that they're getting a tax cut. I'm really not upset.
Cohn and Harwood also tussled over the potential effects of corporate tax cuts and the proposed repatriation tax holiday. Harwood cited a study saying that these efforts would ultimately shrink the economy in the long-term, an assertion Cohn vehemently denied. But in doing so, Cohn mentioned how just 12 months ago, he was helping companies do the opposite of what the GOP's repatriation tax proposal seeks to achieve.
"We don't agree with that," replied Cohn. "We believe that we're going to have a very stimulative effect on the economy by lowering the business tax rate, by lowering the corporate rate, and making America competitive with the rest of the world. Look, a year ago, I was on the other side of this equation. I was advising companies how to get out of the burdensome US tax system."
The House GOP tax bill is set to be approved by the Ways and Means Committee on Thursday. Although as Business Insider's Bob Bryan points out, a question lingers over whether state and local taxes could still be deducted by "pass-through" entities under the legislation. He notes that there's a discrepancy in answers from the Ways and Means Committee and the Joint Committee on Taxation.