In a naked attempt to dole out favors to wealthy Wall Street buddies, former Goldman Sachs executive turned Treasury Secretary Steve Mnuchin is working on a scheme to implement a $100 billion tax break, most of which would go to the richest one percent.
And he wants to do it without congressional approval.
According to the New York Times, Mnuchin wants to use a “legally tenuous maneuver” to lower the tax rate on capital gains, giving away $100 billion in tax breaks through executive fiat.
“If it can’t get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we’ll consider that,” Mr. Mnuchin said, noting he was still exploring whether or not Treasury had the authority to do this.
But Treasury does not have the authority to do any such thing. At least, that was the conclusion of the Treasury Department and Justice Department’s Office of Legal Counsel under President George H.W. Bush, when his administration considered it and determined that it was illegal.
In Mnuchin’s scheme, the billions of dollars would overwhelmingly favor the wealthy, with 97 percent of the benefits flowing to the wealthiest ten percent of households in America. Two-thirds of the benefits would go to the richest of the rich: the wealthiest 0.1 percent.
The plan was met with staunch opposition from some Democrats. “Indexing capital gains under this regime is a boondoggle for the rich, plain and simple,” said Oregon Sen. Ron Wyden, ranking member on the Finance Committee.
“At a time when the deficit is out of control, wages are flat and the wealthiest are doing better than ever, to give the top 1 percent another advantage is an outrage and shows the Republicans’ true colors,” said Democratic leader Sen. Chuck Schumer of New York.
But Trump and Republicans are seemingly hellbent on lavishing the wealthy with inordinate and undeserved tax breaks, whether legal or not.
While CEOs have exploited the tax scam to line their own pockets, average American workers are left behind. After accounting for inflation, wages for workers have decreased since Trump signed the tax scam into law.
The tax scam is also burdening generations to come with more debt. A recent New York Times analysis showed the deficit rapidly increasing this year because of the corporate kickbacks in the tax scam.
And the same day the story about Mnuchin contemplating an illegal transfer of wealth to rich Wall Street buddies, the Treasury Department announced 2018 will see the largest jump in borrowing since the Great Recession of 2008. According to Bloomberg, “the nation’s fiscal health deteriorates despite a strong economy.”
Under this backdrop, “billionaire” Trump and millionaire Mnuchin want to give a $100 billion handout to those who need it least, further ignoring middle-class Americans who are seeing declining wages.
Published with permission of The American Independent.