Steven Mnuchin Unsure if Bill Needed to Shore Up Tax Law -- Update
Treasury Secretary Steven Mnuchin said Friday it isn't clear whether Congress will need to take up a bill to make technical corrections to the sweeping new tax law that took effect this month.
It is possible some corrections may be necessary and officials have discussed it, but said no major problems have been identified yet, Mr. Mnuchin told an audience at a Washington Economic Club breakfast.
"There's nothing that we've identified so far that we think is particularly problematic," he said.
Republican lawmakers have said they intend to pass a technical corrections bill, but any new law is likely to need 60 votes in the Senate, a difficult hurdle.
Lawmakers have already started to re-examine one change that would give some farmers and cooperatives a significant tax advantage over their competitors.
The heads of the National Council of Farmer Cooperatives and the National Grain and Feed Association say they are "working intensively" with Senate officials on a fix that preserves deductions for farmers who sell crops through cooperatives and addresses "unforeseen impacts" on crop sales in the U.S. Farm Belt. Agriculture industry officials this week have speculated a change could be attached to the omnibus spending bill that lawmakers will consider in the coming weeks.
A top official at the U.S. Department of Agriculture on Friday applauded Congress for moving to correct the disparity, and said the tax code "should not pick winners and losers."
"Our expectation is that a solution is forthcoming," Greg Ibach, USDA's undersecretary for marketing and regulatory programs, said in a statement.
Mr. Mnuchin also dismissed an idea, floated by one Democratic congressman, for high-tax states to skirt new rules capping state and local tax deductions by treating those taxes as charitable contributions.
Calling it "one of the funniest things I've possibly heard," Mr. Mnuchin said, "I think most people understand the concept of a charitable deduction that is voluntary, that goes to help people, is very different than the high cost of real estate taxes."
But he didn't clarify whether Treasury or the IRS intends to release formal guidance on the issue or otherwise clarify their position. Asked how he would respond to governors in states that may pursue such policies, he said Treasury would "wait to see the language."
"I can assure you we will audit real estate taxes this year," he added.
Mr. Mnuchin also said the administration is seeking additional funding for the IRS this year to implement the new law, which he said will require a tremendous amount of work by the Treasury Department and IRS.
"We expect that we would hire an additional number of people to help with the implementation," he said of the IRS.
A recent report from that agency's in-house advocate said it would struggle to implement the new tax law without more money, after years of budget cuts. The agency needs to update forms, create new definitions, write regulations and field questions from taxpayers.
Mr. Mnuchin also said he was confident lawmakers would come to an agreement, either long-term or short-term, to fund the government and avoid a shutdown before a current short-term spending bill expires Jan. 19.
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(END) Dow Jones Newswires
January 12, 2018 12:07 ET (17:07 GMT)