Trump Treasury Department suppresses government study contradicting their argument about corporate tax cuts benefiting workers

American Bridge spokesperson Andrew Bates released the following statement after news broke that the Treasury Department removed a study done by career economists concluding that reducing the corporate tax rate primarily benefits corporate shareholders, not workers, as Donald Trump and his cabinet have claimed. 

“The Trump Administration has already been caught lying about how much their tax plan will benefit the wealthiest Americans – including Donald Trump himself – and now they’re trying to suppress the work of nonpartisan, career Treasury economists because it contradicts their preferred fiction about corporate tax cuts not primarily benefiting shareholders over workers. It’s clear that the tax plan Donald Trump and congressional Republicans wrote behind closed-doors is designed to be a windfall for the rich and large corporations, further rigging the economy so that the middle class and those fighting to get into the middle class are left behind. This administration’s attempt to evade the truth will not fool the American people.”

Wall Street Journal: Treasury Removes Paper at Odds With Mnuchin’s Take on Corporate-Tax Cut’s Winners
By Richard Rubin
Sept. 28, 2017 6:41 p.m. ET

WASHINGTON—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.

Asked about the paper’s disappearance, a Treasury spokeswoman responded Thursday: “The paper was a dated staff analysis from the previous administration. It does not represent our current thinking and analysis.”

In her response, she said that “studies show that 70% of the tax burden falls on American workers” and that a “lower corporate rate, as proposed in the [GOP tax] framework, will generate the incentives needed to increase productivity and wages, as well as create jobs.”

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.”

Mr. Mnuchin, who hadn’t worked in government until this year, has repeatedly praised the professional tax staff at the department.

Mark Mazur, the top Treasury tax policy official until January, said he wasn’t sure how removing the link contributed to better understanding of economics.

“The career economists who worked on this technical paper did a great job summarizing the mainstream of economic thought on this important topic. They shifted my thinking a bit, by pointing out clearly how some of the burden gets shifted to labor,” he said in an email on Thursday. “The public interest is advanced by using the best economic science available and being transparent about the analysis undertaken.”

Write to Richard Rubin at