“We see the whole trickle-down through the economy, and that’s good for the economy.”
Top White House economic adviser Gary Cohn’s background as a Goldman Sachs executive leaves him more experienced in the art of talking to really rich people than communicating with the public. That ends up making this interview with CNBC’s John Harwood, published this morning, an extraordinary document, because when Harwood pushes him on a few points, Cohn ends up basically surrendering and admitting the plain truth about the Republican tax plan: that it’s a bonanza for big businesses and the rich, whose main benefit for normal people is a vague hope that prosperity will trickle down from those at the top.
Cohn has been deeply involved in crafting the plan from the White House end, and the regressive nature of the plan both fits Cohn’s background as a rich business guy and the sincere convictions of conservative tax wonks. But experienced political operatives know you’re supposed to say your plans are all about the middle class.
Cohn, by contrast, is so new at this that he winds up actually saying “the most excited group out there are big CEOs, about our tax plan.”
And he’s right — this plan is great for big CEOs!
Why big CEOs love the GOP tax plan
The Republican tax plan offers multiple benefits to Cohn’s “big CEOs”:
- It reduces the corporate income tax rate, which boosts corporate profits and therefore share prices. Since most CEOs’ compensation is linked to share price performance, that means CEOs benefit directly.
- It lets companies take cash that’s been stashed tax-free in foreign subsidiaries and use it for dividends or buybacks that also boost share prices.
- The changes to the rate structure mean that very high-income people will pay lower income taxes.
- Repealing the estate tax helps Read More Here