Treasury Removes Paper at Odds With Mnuchin’s Take on Corporate-Tax Cut’s Winners

https://www.wsj.com/articles/treasury-removes-paper-at-odds-with-mnuchins-take-on-corporate-tax-cuts-winners-1506638463

By Richard Rubin, Wall Street Journal
Sept. 28, 2017

The Treasury Department has taken down a 2012 economic analysis that contradicts Secretary Steven Mnuchin’s argument that workers would benefit the most from a corporate income tax cut.

The 2012 paper from the Office of Tax Analysis found that workers pay 18% of the corporate tax while owners of capital pay 82%. That is a breakdown in line with many economists’ views and close to estimates from the nonpartisan Joint Committee on Taxation and Congressional Budget Office.

The JCT, which will evaluate tax bills in Congress, estimates that capital bears 75% of the long-run corporate-tax burden, with labor paying the rest.

But Mr. Mnuchin has been arguing the opposite, citing other papers that attribute more of the burden to labor. The point is central to Mr. Mnuchin’s argument that workers would benefit from the corporate tax cut the administration is proposing, and switching that assumption would significantly alter the estimates of who would benefit from the Republican tax policy framework released on Wednesday.

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The paper was available on the Treasury website during the summer, and it wasn’t clear when it was removed or whether Treasury intended to publish a new analysis. Other technical papers from 2008 through 2016 remain on its site, along with working papers dating back to 1974.

“This yet another example of how the Trump administration is executing a middle-class con job with their tax scam,” said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, commenting on the removal of the paper. “History has shown most of the pockets lined by corporate tax cuts are found in wealthy shareholder suits. It is disturbing the Treasury Department is burying research proving that trickle-down economics harms American workers.”

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