The findings of the analysis run contrary to Treasury Secretary Mnuchin’s statements that a corporate tax cut will benefit workers the most.
What happened: The Department of Treasury removed an economic analysis from their website. The paper provided evidence that a corporate tax cut would not benefit workers more than owners of capital.
Why it matters: Removing scientific analyses that are pertinent to policies at hand can result in poor decision making that harms Americans. In this case, ignoring the evidence could result in a tax plan that would increase the tax burden on middle-class workers in the United States.
On September 28, 2017 it was reported that the Department of Treasury decided to remove a 2012 economic analysis from the Department of Treasury’s website. The 2012 economic analysis found that workers pay 18 percent of the corporate tax burden with owners of capital paying 82 percent. These numbers are in line with estimates from the Joint Committee on Taxation (JCT), a nonpartisan committee of the US Congress, and the Congressional Budget Office (CBO). For example, the JCT estimates that capital bears 75 percent of the long-run corporate tax burden, with labor paying the rest.
Secretary Steven Mnuchin has been arguing that the brunt of the corporate tax burden falls on workers; thus, the results of this 2012 analysis as well as estimates by JCT and CBO run contrary to Mnuchin’s recently expressed views that a corporate tax cut will benefit workers the most. This argument supports the administration’s proposal of tax reform in the US, which calls for a corporate tax cut. A spokeswoman from the Department of Treasury argued that the 2012 analysis was outdated, stating that “The paper was a dated staff analysis from the previous administration. It does not represent our current thinking and analysis.”
Others have argued that this is a clear example of how the Trump administration is burying scientific evidence in order to deceive Americans. Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, commented on the removal of the paper saying, “This [is] yet another example of how the Trump administration is executing a middle-class con job with their tax scam.” Mark Mazur, former Assistant Secretary for Tax Policy in the Department of the Treasury, said “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 went on to describe the importance of science on this matter, “The public interest is advanced by using the best economic science available and being transparent about the analysis undertaken.”
This is not the first time that we have seen the current administration ignoring scientific evidence when it does not serve their political agenda. We’ve seen science altered on federal agency websites, scientific evidence ignored (even when the health of children is at risk), and scientists dismissed from federal agency advisory boards. It seems likely that the administration will continue this pattern of ignoring and blatantly dismissing scientific evidence in the policy-making process.