×

Trump advisor Cohn: Simplifying the tax code will tax the wealthy at a higher rate

  • White House economic advisor Gary Cohn told CNBC that simplifying the tax code actually could mean higher earners would pay more.
  • President Donald Trump campaigned on a three-prong approach of lower taxes, less regulation and higher infrastructure spending.

Chief White House economic advisor Gary Cohn rejected arguments that the administration's tax plan will benefit the wealthy most.

In fact, Cohn told CNBC that simplifying the tax code actually could mean higher earners would pay more.

"Simplification does not mean tax cuts for the higher end of the bracket. We can simplify and we can get rid of a lot of the deductions," he said in a live interview Friday morning on "Squawk on the Street." "Those deductions actually affect the high-bracket payers, so when you actually simplify that tax returns you're actually affecting the high taxpayers the most."

"As you simplify the tax system, you actually reduce taxes on middle class income payers and average Americans and you're actually taxing the higher end at a higher rate," Cohn added.

President Donald Trump campaigned on a three-prong approach of lower taxes, less regulation and higher infrastructure spending.

However, critics say the plan is too focused on lowering rates at the high end and for giving corporations tax breaks. Cohn, though, said the program will be aimed at reducing the tax burden overall and making the U.S. more competitive globally.

"We will hire people. When you hire people you compete for labor. When you compete for labor you drive wages," he said. "We need wage growth, we need job creation in this country. We've got get competitive with the rest of the world."

Cohn spoke shortly after the latest nonfarm payrolls report showed the economy created 156,000 jobs in August, less than the 180,000 that economists had expected.

However, he said the bigger picture is that the employment picture continues to brighten, with unemployment at 4.4 percent and the economy growing at 3 percent in the second quarter..

"No, we're not disappointed with those numbers, we're not disappointed at all," he said. "We're looking at the trend overall, we're looking at job growth, we're looking at job creation, and we see a lot of very good momentum in the numbers."

Earlier in the week, Trump delivered a speech in Missouri during which he also emphasized the importance of tax reform. He also pushed a proposal that would allow companies to bring back profits stashed overseas at a lower rate.

Treasury Secretary Steven Mnuchin told CNBC on Thursday that he's optimistic tax reform can get done by the end of the year.

Cohn said he and Mnuchin have been working with congressional leaders "on a skeleton and framework for what taxes need to look like" and are continuing to "really build out the skeleton, put the muscles on it, put the skin on it and deliver a tax plan."

WATCH: CNBC's full interview with chief White House economic advisor Gary Cohn