Mick Mulvaney is the Director of the Office of Management and Budget and a 1989 graduate of the School of Foreign Service. He is also a Georgetown parent as of this fall. In two events on campus hosted by Georgetown University College Republicans and GU Politics, Mulvaney spoke to Georgetown students about his career in public policy and the responsibilities of the OMB, an post that doubtlessly includes the subject of much controversy, taxes.
Mulvaney’s office “does everything,” from spending 19 months crafting the president’s budget, to policing the quality of other executive programs, all the way to recommending which bills the president should veto. It has always been Mulvaney’s “dream job,” perhaps especially due to the circumstances in which he does it.
In both events, the dialogue almost exclusively centered around Donald Trump’s tax plan, a plan which Mulvaney’s office has performed an enormous role in both crafting and selling. The central purposes of the GOP tax agenda are to promote growth, increase wages, simplify the tax code, create jobs, and incentivize corporate investment in the U.S. economy. The Director passionately asserted that this plan is a truly “across the board” boost to the welfare of American citizens. Here’s why.
With regard to the lower class, the plan benefits Americans by doubling the standard deduction, raising the child tax credit, removing marriage penalties, increasing the number of families in the zero bracket, generating natural wage increases, and inducing job creation.
For the middle class, the plan scores highest in its lowering of corporate income and pass through rates along with its shift toward a territorial tax system abroad — not to mention the list of benefits mentioned above. In the United States today, the vast majority of corporate entities are small businesses that do not pay the 35% corporate income tax. They pay a pass through rate proportional to the income tax brackets of their owners. The Trump plan lowers this rate, aiding small business owners and middle class employees. It also incentivizes growth and capital investment by lowering the 35% rate on larger corporations — the third highest in the world — to a friendlier 20%, which is still mediocre by international standards. The shift from a worldwide tax system to a territorial system — that is, having overseas American businesses pay taxes only where they operate rather than twice if they choose to reinvest their capital in the U.S. economy — would drastically increase household incomes in the U.S. according to Mulvaney by incentivizing investment in American growth and jobs, rather than keeping wealth overseas for fear of punitive taxation. These potential shifts in the tax code for corporations are momentous, so it’s no surprise that Mulvaney introduced them as “the most important” aspect of the plan.
Finally, the Trump plan does indeed improve the economy for the wealthy. As tragic as that might be in the eyes of most on the Left, who will inevitably continue to smear it as “trickle-down economics at the expense of the poor”, it’s “just math” according to Mulvaney. The plan will seek to eliminate the death tax, possibly lower the top rate from 39.6% to 35% (this will be up for negotiation as some in the Republican party believe an additional top bracket at 39.6% for annual seven figure earners should remain in the new GOP agenda), and of course incentivize corporate expansion and investment as stated above. Republicans, much like their OMB director, believe this will boost the private sector at all levels, from increasing returns for investors to expanding the job market for working class families. They also believe, much like John F. Kennedy did when he passed “tax cuts for the rich” in 1964, that lowering taxes on the top bracket will incentivize the rich to avoid placing their wealth in tax shelters and hiring tax lawyers, paying more instead of less. The OMB does not believe revenue will crumble, but that economic growth and the elimination of loopholes and adverse incentives will keep government revenues high, which ought to crack a smile on the faces of Trump’s biggest critics.