Gary Cohn, chief economic adviser to President Donald Trump, said a "trickle-down" in the tax package will help the economy.
Cohn and Harwood also tussled over the potential effects of corporate tax cuts and the proposed repatriation tax holiday.
The tax overhaul bill released by House Republicans last week cuts the corporate tax rate from 35 percent to 20 percent and sets up a new 25 percent rate for pass-through businesses.
"We create wage inflation, which means the workers get paid more; the workers have more disposable income, the workers spend more".
Cohn: You've got to wait till the whole plan is done and see where we finally end up, and see what the plan comes out. Advocates of privatizing public education, for example, steer clear of the word "vouchers", for example, because they're not popular - so they use pleasant sounding euphemisms such as "school choice" instead. "If companies were making that money onshore, they'd be paying their labor, they'd be paying their workers more money".
And yet, Cohn, perhaps inadvertently, said what he actually believed, confirming what critics of the Republican plan have been saying all along.
In the same CNBC interview, Cohn added, "It's not our intention to give the wealthy a tax cut".
Harwood: But they're getting one.
"We do not believe that death should be a taxable event", he said. According to Gary Cohn, the Republican plan delivers massive tax benefits to millionaires and billionaires, but that's not what he and the plan's co-authors "set out" to do.
If I didn't know better, I might think the proponents of the GOP tax plan are trying to make it less popular. Look, a year ago, I was on the other side of this equation. "I was advising companies how to get out of the burdensome USA tax system".