As the Trump administration begins implementing the new tax law, nothing “particularly problematic” has surfaced yet that would necessitate a technical corrections bill this year, Treasury Secretary Steven Mnuchin said.
“I don’t know if we will or we won’t” need a technical corrections bill, Mnuchin said in an on-stage interview January 12 hosted by the Economic Club of Washington D.C. “The good news is there’s nothing that we’ve identified so far that we think is particularly problematic, that we think we’d need a technical correction” measure to fix, he said.
That said, Mnuchin did acknowledge the possibility that technical correction-worthy issues may arise, noting that there are about 80 provisions in the law that require new Treasury regulations. Implementing the Tax Cuts and Jobs Act (P.L. 115-97) will involve “a massive amount of work” for the IRS and Treasury, he acknowledged.
That additional workload means “that we would need to hire a significant number of people to help,” Mnuchin said. When asked if that meant hiring more IRS agents to help with audits, Mnuchin said the Treasury Department is exploring ways to use technology to automate audits and close the tax gap.
While Mnuchin has previously expressed interest in upgrading IRS systems and automating audits, President Trump’s fiscal 2018 budget proposal called for a 62 percent reduction in the IRS’s business systems modernization program.
Building on his comments from the previous day, in which he blasted efforts by some states to find workarounds to the state and local income tax deduction, Mnuchin said the idea of replacing property taxes with tax-advantaged charitable contributions to a public sector fund is “one of the funniest things I’ve possibly heard.” He defended the new law’s $10,000 cap on deductions, arguing that it will have a “meaningful impact for a big chunk of the country.” He also insisted that imposing the cap was not a politically motivated decision to raise revenue from high-tax, mostly Democratic states.
The Treasury secretary also defended the decision not to include any conditions in the tax bill requiring that companies repatriating accumulated foreign earnings invest the money in a prescribed way. “Our view was, let the companies decide to how allocate that capital,” he said, explaining that some industries are better off making capital investments, while other industries would benefit by raising wages or hiring more workers.
Looking ahead, Mnuchin affirmed that passing major infrastructure legislation this year remains a top priority for Trump, and unlike tax reform, an infrastructure bill “definitely has to be bipartisan.” The White House is set to release an infrastructure proposal later this month that could include some tax components.
Legislative action to try once more to dismantle the Affordable Care Act remains under discussion, but no decisions have been made yet, Mnuchin added.
Follow Jonathan Curry (@jtcurry005) on Twitter for real-time updates.