Transcript for Treasury secretary on Trump administration's new tax plan
Our framework includes our explicit commitment that tax reform will protect low-income and middle-income households and not the wealthy and the well-keked. They can call me all they want. It's not going help. I'm doing the right thing. And it's not good for me. Believe me. President trump on Wednesday. Touting the tax plan. Let's take to it the treasury secretary. Steven mnuchin. Thank you for joining us. We heard the president right there 7 you and your colleagues have said the wealthy will not get a tax cut turpd plan. It's hard to see how that can possibly be true given that your plan proposes cutting the top rate, eliminating the Al tern Ty minimum tax and cutting the rate on pass-through entities. 80% of the benefits will flow to the top 1%. We'll show that chart. The wealthiest getting the biggest cut. It's a fact, isn't it? No, that's not a fact. Great to the with you this morning. As we release the details of the the plan, we'll show all the different impacts to different people. As the president has said all along, the changes to the income tax system are meant to create middle-income tax cuts and make corporate and business tax competitive so we can bring back tons and tons of jobs and capital to this country. I know that's the objective. Based on the evidence put out so far, all the cuts I just talked ab, that T will benefit the wealthiest the most. George, I just don't think that's the case. As we have talked about, changes in this top bracket are offset with elimination of almost every single type of deduction other than charitable giving and the mortgage interest deduction. And, you know, this has impacted different people in different states. But, again, we'll go through all the the details as we go through the congressional process of the house and the senate. We'll show U all the distribution distributions. A huge component of the D businesses in the country are pass-throughs. We want them to have the tax relief to gout and hire more workers and invest more capital. I don't understand how you can say based on everything that is put out so far that it's not a tax cut for the wealthy. The vice president has said it's an across-the-board tax cut. The welt Thi will get benefits the. Well, George in the high-tax states, the impact is about 5% or 6%. If we cut the rate to 35%, that's an increase for the wealthy in the high-tax states. As we have said, we're considering what we do. If there is a need for a fourth bracket, to create more relief. So, this will all continue the go through the congressional process. But eliminating the estate tax will only go to the wealthiest Americans. Those with estates greater than $11 million. You are correct this that sense. Again, we have been talking about the income tax system. As it relates to state tax, the death tax, we believe that people get taxed once and not twice. That will enable to keep lots of family businesses passed along. But the estate tax, you are correct. The majority of the estate taxes is paid by the wealthy. So we're focused on changes to the income tax system. But you proposed to eliminate estate tax. You say the objective is that the wealthiest will not get a benefit. Are you saying that the president is going veto a final bill if it provides a tax cut to the wealthiest Americans? The president very much wants to get tax reform done because it's critical to the growth and the economy. That's something we have been talking about since the campaign. We fund mentally believe we can get back to a sustained 3% gdp or higher. Which adds literally millions and millions of jobs and over $10 trillion to gdp. That's our focus. The president wants to get tax reform. We're working with the house and senate. He's said -- if congress sends him a bill that provides benefits to the wealthiest Americans, will the president vefo it? I think the president will look that the bill when it comes, in its entirety. The president's octoberive and I think congress has heard that, is to create middle class tax cuts, not tax cuts to the wealthy. The existing plan has tax rates going up in many, many states. We're sensitive of the impact to the economy. We want the federal government out of the business of subsidizing the states. We think that's the right thing to do. Lit have impact on different states. We'll continue to look through this as we go through the process. There could be that impact. Based on the evidence you have put out so far, independent analysts say the wealthy be benefit. The president says he won't benefit. Hard to see how that's true, given the E limit nation of the amt. Which has benefitted the president in the past. But also,@ we talked about the pass-through entities. Based on the president's financial disclosure form just from this year. We want to put it up right now. He had more than $500 million in taxable income from those pass-through entities. Taxed at 39.6%. You cut that to 25%, that's a savings of $75.7 million based on the president's financial disclosure form last year. George, as we said all along, as we change the pass-through rate, it's important that we have guardrails around those rules. As you said, this is not about creating a tax cut for the rich. So, we spent a lot of time with the staff at the house and senate, we're continuing to work on those rules. But we're going to make sure that that's not a way that the rich can use to pay lower taxes than they should. Whether it's the president or anyone else. Well, based on last year's form, he would have gotten that benefit. How are the Americans going to know whether the president gets this benefit if he doesn't release his tax returns? George, that's just not fair. We haven't published the rules. You're make age supgss that I don't think are correct. I wouldn't need to make ah the assumptions if we had the president's tax returns. He has said he won't benefit from this tax plan. My question to you is how are the American people going to know that if he's not releasing his tax returns? I think the American 34rik will be comfortable with the information they have. As you have pointed out, the pass-through rate is something we need to be careful about. As you have Ju described. We're going to make sure there is the proper rules. Full transparency. As we go through the legislative process so rich people can't take advantage. You talked about transpency. Can you guarantee that the president won't get a tax cut under his plan and how will you demonstrate it? Again, as I have said all along, the objective of the president is that rich people don't get tax cuts. And, we're perfectly comfortable, as we go through the process, we'll explain to the American public how that work. We'll give plenty of examples. Will you give the information about the president himself so he can back up the claims that he's made that he won't get a tax cut under this plan? George, I can't comment on what the president will do or what he won't do on that. Again, I'm perfectly comfortable that the American public will understand this as we go there this process. Because, what this is about, is creating middle income tax cuts. And creating a corporate tax system that is competitive. We have one of the highest tax rates in the world. We have a concept of defefrl. Our companies leave trillions of dollars offshore. We want to bring that money back. We want to create expensing that insent vise companies to create jobs here. The American public understands this is about jobs. This is a jobs bill. I don't understand how you can provide that assurance to the public without releasing his tax returns. Under the plan, from what we can tell so far, most middle class families will get a tax cut. There appears to be many middle class families that get a tax increase. By 207, taxes would rise for roughly one-quarter of tax pairs, including near ly 30% of those with incomes between $50,000 and $50,000 and 60% for the people making between $150,000 and $300,000. The top tax person in the state of New York said about 3 million people will see their taxes go up. Nearly half of the middle class tax paise taxpayers in new yorkh will get a tax increase. I don't know how the tax policy center can publish those when they don't have all the details. Others have waited, which I think is responsible when we release all the information. But that's on you, isn't it, if you haven't released the details? We're working with the house and senate. It's going through committees. Those details will be released. We have said that continuously. As it relates to no, I'm sympathetic to the issues in new York. I have paid taxes in New York and California, which are two of the highest taxed states. And, you know, if we eliminate the subsidies to New York and California, that creates certain issues. But, I don't think it's fair that a bunch of other states are subsidizing New York and California. And, you know, that will be an issue for me as well as I pay taxes there. So if taxes go up on middle class new yorkers, so be it, middle class californians. No, that's not what I said. We're trying to create certain adjustments so the middle class in New York and California don't get hit hard by this. But there are issues, as you have said, when we change a system. Where we eliminate the tax subsidy of certain states that will impact different people in different states. We're working through the details of that. That's why, we haven't released the full plan. We're working with the committees. We want the committees to understand this. And we're very focused on middle income tax relief. You can't guarantee that all middle class individuals receive tax cut, can you? Some get a tax increase. No, it is our objective that the entire middle class does get a tax cut. And that's something we're working on the details. As you said, you can't make guarantees. Every single person's taxes are different. People take advantage of different things. We can't make that guarantee. We can say, that's our objective. That's what we're working two. We want to protect the middle class. We went to Indiana last week. A family getting a $1,000 cut under our plan. Businesses getting tax cuts so they can grow bs. That's what we're trying to do. Again, that's what you're trying to do. Let me go back to the question, similar to the one I asked earlier. Will the president veto a bill if it comes back with middle class tax increases for some Americans? The president is not setting criteria up front. What the president is doing is working with congress. It's been over 30 years since we have had tax reform. We have a broken system. We have to fix it. We have to create jobs. We have to simplify taxes. And we have to make a system that works for all Americans. And all American businesses. This is an American jobs act. And the president is going to work with congress to get these objectives. As I said, hopefully, we'll get something on his desk to sign so we can continue to have the economic growth in the country we need. One of the other big questions, the impact on the deficit. Bob corker said he won't vote for a tax bill that increases the deficit. There is no way that Bob corker is going vote for a tax reform bill that I think in any way is going the add the to deficit. It's not going happen. Never, never going happen. Never, ever, ever. Again, based on the details you provided so far, there's about $2 million more in tax cuts than closing loopholes and ending deductions. Can you commit that the bill will not increase the deficit? If it does, are you concerned you'll lose the votes of senator corker and others? I have had the opportunity to meet with senator corker and others and walk them through the math. Here's the math. So you understand it. Our current plan on a stac basis will increase the deficit by $1.5 trillion. That will be offset by, there's a half trillion dollars' difference between the baseline in policy, which has rolled over. That $1.5 trillion should be addressed down to $1 trillion. We believe there will be $2 trillion of additional growth. That's with a conservative 2.9% gdp over the ten-year period of time. The median forecast by the fed is 1.8% over time. And 20 of 26 economists surveyed by Bloomberg say this will increase the deficit. And they're too big. They're not taking into account what the administration is doing. Whether it's regulatory relief. Trade renegotiations or tax reform. We have 3% gdp numbers because you see the economy is anticipating and reacting to president trump's plan. You're correct. If we don't pass through on this tax reform. We won't get this growth. That's why we need it. That's why this is critical to get done. If you don't get the growth, will you scale back the spending and tax cuts? We're confident we'll get the growth. If we don't, that is something that can be changed over time. Mr. Secretary, thank you for your time this morning. Thank you very much.
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