The Mooch is in

The Mooch expressed to me that he wanted the candidate to be “well organized” and he took comfort in Trump’s successful recruitment of Steven Mnuchin, the former Goldman Sachs banker whom Trump had recently named as his national finance chairman. “For this guy to join forces with Donald Trump says two things,” the Mooch continued. “He’s a very good recruiter of super-talented people and there is something different going on here that could be a potential entrepreneurial disruption in Washington. And whether you like Donald Trump or you don’t like Donald Trump, he is an entrepreneur and he might be able to create an entrepreneurial Washington, D.C.”

During one of his conversations with Trump, Scaramucci said, the candidate explained that he needed his help raising outside funds, and suggested that Scaramucci get in touch with Mnuchin, himself. (While much of Trump’s primary campaign was self-funded, he is widely expected to try to raise more than $1 billion to compete in the general election.) For Scaramucci, this was all good. He knew Mnuchin from their shared time at Goldman. In fact, he had also worked for Mnuchin’s father, the legendary Goldman partner Robert Mnuchin. (Robert is one of the many bankers, like his son, to prove there is life after Goldman. He left to start his own high-end art gallery on the Upper East Side.)

So Scaramucci got on the horn with his old colleague and promptly invited him to SALT, where Mnuchin spent Wednesday trawling the well-heeled crowd for Trumpian-size donations. Mnuchin also attended the dinner Wednesday night, sitting across the oval table from Will Smith, who stars in a new adventure movie, Suicide Squad, that Mnuchin helped produce. (Mnuchin made a fortune after the financial crisis when he bought a piece of a failed bank, IndyMac Bancorp, in Southern California, renaming it OneWest Bank, and then selling it to CIT Group for $3.4 billion and nearly doubling his investment.) “It was easy for me,” the Mooch told me of his decision to align with Mnuchin in support of Trump. “Steve Mnuchin is an accomplished guy. A Wall Street guy! A Hollywood guy! He’s built an incredible career.”
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But the vibe in Vegas seemed to be moving in Trump’s direction, especially as the conference unfolded. “We talk all day long about Wall Street,” Scaramucci told me, “but there are two streets: Entrepreneurial Avenue, that’s Donald Trump Street, or the Clinton cul-de-sac. Tell me, which street do you want to live on?”

It’s pretty clear that pinning Donald Trump down on actual policy specifics is going to be tough. He has released a tax plan (written down on actual paper), and until he decides to tear it up, it’s the best road map we have for what he wants to do with tax policy.

The road map charts the course to really large tax cuts, with the bulk of them going to very-high-income households: At the plan’s core is a mostly-routine Republican tax plan that includes giveaways similar to those intended by Marco Rubio, Jeb Bush, and Ted Cruz. The difference is that the plan throws people off the scent of who it benefits, because it contains some novel (and particularly stupid) detours that make no sense as good policy.

When Trump says things like “But the middle class has to be protected. The rich is probably going to end up paying more,” one might come away with the idea that this is a middle-class focused tax cut. The guts of Trump’s tax proposal, however, reveal how obvious of a giveaway to the already-rich it is. To get an idea of just how much money is being doled out, the Tax Policy Center (TPC) estimates that Trump’s plan would cost about $9.5 trillion over a decade. 35 percent of Trump’s tax cuts go to the top 1 percent of households during the first year of his tax plan (TPC estimates that as households making over $732,323 annually). This is more than the combined share that the 80 percent of us making under $142,601 a year can expect to see. And this regressivity actually grows over time: By 2025, the top 1 percent will take about a 40 percent share of the tax cut – almost equivalent to the combined share that the bottom 90 percent will see. The tax cut’s regressivity is highlighted even further by looking at the share within the top 1 percent. About half of the share going to the top 1 percent is actually going to just the top 0.1 percent – households making over $3,769,396 in the first year.


All of this likely underestimates both how large the tax cuts would be and how much would go to wealthy households, because Trump creates a special loophole in his tax plan. Following the lead of Kansas Governor Sam Brownback (who is probably not the world’s best authority to turn to on sensible tax policy), Trump caps taxes on income generated by pass-through entities at 15 percent instead of his new 25 percent top tax rate. Pass-through entities are businesses whose incomes are not taxed at the corporate level, but instead “passed through” entirely to the business owners and then taxed at individual income-tax levels. This creates enormous incentives and opportunities for tax avoidance by high-income households, who could simply reclassify themselves as pass-through entities to avoid paying the 25 percent top tax rate on individual income. Adding this loophole to their estimate, Citizens for Tax Justice found that Trump’s tax plan would cost $1.2 trillion more and increase tax breaks for high-income earners substantially.

There is clearly a huge contradiction between Trump’s on-paper tax plan and his rhetoric about taxes on the campaign trail, and it doesn’t seem likely that middle class will come out on top. A quick example:. All of the remaining presidential candidates, including Trump, intend to close the carried interest loophole. And since it often allows hedge fund managers, the top 25 of which earned $12.94 billion last year, to be taxed at the preferable 23.8 percent capital-gains-rate instead of the higher rate charged to ordinary income, it’s easy to see why. Trump has even called out hedge fund managers for not being taxed enough. In doing so, Trump masquerades as a man of the people when the reality of his proposed tax changes will actually benefit hedge-fund managers even more. As TPC points out, the entities that earn carried-interest income—including hedge fund managers—are organized as a type of pass-through entity. This means that Trump is actually proposing to lower the tax rate hedge-fund managers pay from 23.8 percent to the new 15 percent rate his plan introduces for pass-through entities. This hardly sounds like a crackdown on people allegedly “getting away with murder.”

The only details Trump has committed to when it comes to taxes show that he intends to hand out massive tax cuts to the rich.