The Treasury secretary-designate has simply not been checking his work. If he had, he probably would have noticed the $100 million hole in his financial disclosures. And while, in fairness, he probably did not intend to establish the “rule” that now bears his name when he told the Senate, “there would be no absolute tax cut for the upper class,” he probably also should have checked the numbers to make sure it was possible. Which it is apparently not.
Mnuchin’s pledge was that any tax-rate reductions for the rich would be offset by closing tax loopholes they currently make great use of. The problem is, loopholes that big don’t exist, but the liberal conspiracy called “mathematics” still does.
If Republicans insist on lowering taxes on top wages, capital gains, estates and cash-flow and pass-through income as advertised, “there’s not a lot of latitude to limit itemized deductions further,” Mr. Viard said.
Any plan to curb itemized deductions would be partly offset by Mr. Trump’s plan to increase the standard deduction. Curtailing mortgage deductions for the most expensive homes is probably a good idea, Mr. Viard said, but that isn’t going to do much to raise revenue from those at the top of the income pyramid, and the deduction is already roughly limited to the interest paid on $1 million in mortgage debt.