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Gary Cohn: Family earning $100,000 a year would get $1,000 tax break under GOP tax plan

  • White House economic advisor Gary Cohn said a family of four with an income of $100,000 a year would see an annual tax savings of about $1,000.
  • Republicans issued the tax overhaul plan this week to simplify the tax code and provide breaks to most filers.

Middle-income families will see real benefits as a "basic core premise" of the Republican-sponsored tax reform proposal, White House economic advisor Gary Cohn said Thursday.

As an example, Cohn said a family of four with an income of $100,000 a year would see an annual tax savings of about $1,000.

"This is a basic, core premise of our plan. We're committed to it and we're sticking to it," Cohn said at an afternoon news conference.

Cohn said that tax break would up the standard of living for Americans and generate growth.

"If we allow a family to keep another thousand dollars of their income, what does that mean? They can renovate their kitchen, they can buy a new car, they can take their family on vacation, they can increase their lifestyle," he said. "That's what our tax plan has to do."

Director of the White House National Economic Council Gary Cohn.
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Director of the White House National Economic Council Gary Cohn.

Republicans issued the tax overhaul plan to simplify the tax code and provide breaks to most filers. It breaks rates down into three categories and slashes corporate rates. The plan also seeks to give companies a break for profits stashed overseas while doubling the standard deduction for most filers.

Cohn said earlier that the reform plan will generate growth of more than 3 percent that will pay for the tax cuts.

He repeated that assertion during the news conference, saying that a 1 percent gain in GDP would generate $3 trillion in economic growth that would easily pay for the estimated $1.5 trillion price tag of the tax cuts [though one think tank put the cost closer to $2.1 trillion].

In addition, he pledged the GOP-sponsored measure would tighten up loopholes that allow business executives to pay lower rates.

"Our tax plan is aimed at making sure we give middle-class Americans a tax cut," he said. "That is what we are spending all of our time doing."

The tax reform plan has faced criticism on several fronts, from the likelihood that higher earners will reap more benefits to whether overseas profits brought back to the U.S. at a reduced tax rate will do anything to boost economic growth.

On the latter point, the specific criticism has been the repatriated portion of the $2.5 trillion stored abroad would be put in the pockets of shareholders, which Cohn said wouldn't be a big problem.

"If that happens, that's fine," he said. "We know that that money will get invested right back in the economy and drive jobs, drive economic growth, drive wages and drive prosperity."