President Donald Trump and his top economic adviser shot down a proposal by White House chief strategist Steve Bannon to raise taxes on the rich.
In an interview with The Wall Street Journal last week, Trump quickly dismissed Bannon’s idea to raise top income-tax bracket to 44%. Bannon has floated the tax hike in internal White House discussions but has been met with dismissal and mockery from some of his West Wing colleagues, as well as conservative groups working closely with the White House on tax policy.
“Steve Bannon was saying that maybe you want a higher income tax than the 40 percent,” the Journal said during the 45-minute interview, according to a transcript obtained by Politico. The Journal’s previously published excerpts did not include this exchange.
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“No, that was not right,” Trump said. “That was not a correct statement, no.”
The Journal appeared to have slightly mischaracterized Bannon’s position in its question: though he has floated the tax hike idea, Bannon has not suggested that the president has also supported it. Nevertheless, Trump’s comments appear to shut the door on the idea as part of any large White House tax reform proposal.
Though he ruled out raising income tax rates, the president claimed that the rich could see their tax bills go up under his plan—presumably as a result of the elimination of deductions and other tax code carve-outs, though no concrete, comprehensive tax plan has yet emerged from the West Wing.
“I was with [New England Patriots owner] Bob Kraft the other night,” Trump mused. “He came to have dinner with me. He’s a friend of mine. And as he left, he said, ‘Donald, don’t worry about the rich people. Tax the rich people. You got to take care of the people in the country.’ It was a very interesting statement. I feel the same way.”
Gary Cohn, the president’s chief economic adviser, also sat in on the meeting with the Journal. Cohn does not support Bannon’s proposal and has been at odds with Bannonover the ideological direction of the administration.
Republicans in Washington are expected to soon roll out more details on their plans for taxes, and there is no indication that they plan to raise them on the rich. Capitol Hill sources say there has been talk of leaving the top income tax rate as-is at 39.6%, but that even that idea would be a hard sell among congressional Republican leaders and committee chairs.
The interview with The Wall Street Journal is the first known instance of the president publicly swatting down his chief strategist’s well-publicized but dead-on-arrival idea.
Despite a near total lack of real momentum behind Bannon’s idea, which was first reported by Axios, it has received significant media attention amid impending efforts to change the tax code. But internally, White House officials conceded Bannon’s populist tax-hike idea—which runs afoul of central conservative orthodoxy—was a pipe dream.
“[Bannon] says a lot of things,” one White House official told The Daily Beast last month. “I don’t think he even thinks this will ever happen.”
Conservative and libertarian groups that staunchly oppose the majority of tax hikes were also shrugging. Heritage Action for America, FreedomWorks, and Americans for Tax Reform all told The Daily Beast that Bannon’s proposal had not come up, or was not under serious consideration, in their many discussions with the administration.
Grover Norquist, president of the influential group Americans for Tax Reform, told The Daily Beast that he hadn’t seen the White House try to pitch the idea with any vigor. Bannon’s proposal “is not part of the debate at present,” he said. “I don’t see that this one has gotten any bounce or pickup.” Norquist said Bannon’s proposal would violate an ATR pledge to oppose tax hikes signed by hundreds of state and federal officials, including Trump.
Norquist said last month he hadn’t brought up the issue directly in discussions with the White House.
“It’s embarrassing when you ask somebody about a very silly idea they put forward,” Norquist said. “It’s up there with, ‘Was that you that farted?’”
